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refusing w-9

Hi, 

 

The lady who has been cleaning my office refuses to complete w-9 so I am not able issue her 1099 for her income in 2020. What can I do in this case?

 

Thanks. 

1 Best answer

Accepted Solutions
Level 15

refusing w-9

Never pay anyone a single penny until that form is filled in for this very reason.     

 

So do you pay in cash/check/credit card?  Does she give you receipts ? 

 

If she refuses to give you the proper information for the 1099 then either fire her  and/or  tell her you will still be giving her a 1099 and she would be the one paying the penalty ...

 

You can still issue a 1099-MISC without the social security number. However, to maintain compliance with IRS guidelines, you must make a formal request to the subcontractor for his identification number before the end of the year.

 

If you do not have the Social Security number by the time to file Forms 1099-MISC, you should leave the identification number box empty, but still submit the report to the IRS.

 

The IRS will send a notice stating that the number is missing.  This notice must be sent along with a backup withholding notice and W-9 form to the subcontractor. This notifies the subcontractor that he will be subject to withholding until he submits his identification number.  He is also subject to a penalty of $50 for failure to furnish the Social Security number to you.

 

 

 

 

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6 Replies
Level 15

refusing w-9

Never pay anyone a single penny until that form is filled in for this very reason.     

 

So do you pay in cash/check/credit card?  Does she give you receipts ? 

 

If she refuses to give you the proper information for the 1099 then either fire her  and/or  tell her you will still be giving her a 1099 and she would be the one paying the penalty ...

 

You can still issue a 1099-MISC without the social security number. However, to maintain compliance with IRS guidelines, you must make a formal request to the subcontractor for his identification number before the end of the year.

 

If you do not have the Social Security number by the time to file Forms 1099-MISC, you should leave the identification number box empty, but still submit the report to the IRS.

 

The IRS will send a notice stating that the number is missing.  This notice must be sent along with a backup withholding notice and W-9 form to the subcontractor. This notifies the subcontractor that he will be subject to withholding until he submits his identification number.  He is also subject to a penalty of $50 for failure to furnish the Social Security number to you.

 

 

 

 

View solution in original post

Level 15

refusing w-9

You are required to withhold 24% of payments as "backup withholding" and pay them to the IRS.  This would be reported on the 1099-NEC form in box 4.  If the employee files a tax return, they can get credit for the amount withheld.  In other words, if their gross wages are $1000, you pay them $760 and send $240 to the IRS.  

 

https://www.irs.gov/pub/irs-pdf/fw9.pdf

 

https://www.irs.gov/pub/irs-pdf/p1281.pdf

 

You should have refused to hire them until they provided a tax number.

 

You might want to fire them now, if you can get a replacement.  It is not required that you fire them, but it is required that you start collecting backup withholding starting from the day they refused to provide their tax number.  

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
Level 15

refusing w-9

Yes ... for 2020 the 1099-misc for box 7 income  is going to be reported on a resurrected 1099-NEC form.

 

And talk to her about the required withholding ... if you have been paying her say $1000 a week and she has refused to fill in the W-9 form for say 4 weeks then you have to make up for that lost time ... $240 x 4 = $960 thus her next check would only be for $40 ... this should be enough to get her to fill in the required form.

Level 15

refusing w-9

The below refers to the W-10, which is for caregivers. So if the person was not a caregiver, it's the form W-9.

Caregiver refuses to supply SSN or EIN

I can understand why someone would not want to give you their SSN. You understand too. But maybe the caregiver isn’t aware of just how fast and easy it is for them to get an EIN (Employer Identification Number)?  Make them aware that they can go online to http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-... and it will only take them about 10 minutes to get an EIN – which they can then provide to you as required by federal law.

Assuming you have already requested this information from your dependent care provider, and they still refuse to provide it. here is the procedure that you must follow, in order to claim the dependent care credit without the provider’s SSN or EIN.

First, understand that you can not e-file your return without the caregiver’s SSN or EIN. You will have to print, sign and mail it to the IRS. There is no alternative or workaround for this.

Next, print out a form W-10 (Dependent Care Provider’s Identification and Certification) from the IRS website at http://www.irs.gov/pub/irs-pdf/fw10.pdf.

Fill out the W-10 form with all the information that you know.

Make 2 additional copies of the filled out W-10 for your own records.

Mail the form to the caregiver via certified mail. Don’t lose your post office receipt.

The caregiver has 10 calendar days to respond. If they respond with the information you need, then you’re good to go. If they have not responded, then on the 11th day after you mailed it certified mail:

Select the “print and file” option for your tax return. This will print only the documents required for filing, along with an instruction sheet that contains the address of the specific IRS processing center you will mail it to.

Include in your mailing a copy (not an original) of your proof of notification (the certified mail receipt you got at the post office), and a copy of the W-10 that you sent to the caregiver.

That’s it. While this will delay your refund (it’ll be 6-8 weeks before you get it), you’ll still get the credit. At this point, it’s no longer your problem – it’s the caregiver’s.

Anonymous
Not applicable

refusing w-9

today is the 8th 11 days would put it around the 19th which makes the return late. no problem if they don't owe

 

 

for the taxpayer, next time you hire a caregiver get their SSN or EIN before they start work. if they refuse find someone else.   this will save you a lot of grief come filing time. 

Level 15

refusing w-9


@Anonymous wrote:

today is the 8th 11 days would put it around the 19th which makes the return late. no problem if they don't owe

 

 

for the taxpayer, next time you hire a caregiver get their SSN or EIN before they start work. if they refuse find someone else.   this will save you a lot of grief come filing time. 


I think @Carl was cut-and-pasting some boilerplate that can be reinterpreted to apply to other independent contractors, but the original taxpayer said this was his office cleaner who has already repeatedly refused to return the W-9.    So backup withholding is the next step.

 

It is a good and important point that if the office cleaner is just concerned about their privacy and not actually trying to avoid taxes by working under the table, they can get an EIN from the IRS for free in 15 minutes online. 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
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