What should our HOA do when a vendor won't give us a W-9?

By OurHOA · General information · Revised November 5, 2026

What an HOA treasurer does when a vendor won't send a W-9: when 24% backup withholding applies, how to deposit it, Form 945, 1099 box 4 and IRS B notices.

Part of the HOA board handbook: treasurer and money.

Short answer: no W-9 means no payment, or 24 percent to the IRS

Federal law gives the association two choices when a vendor will not hand over a taxpayer identification number. Hold the payment until the W-9 arrives, or keep back 24 percent of each reportable payment and send it to the IRS as backup withholding. The IRS instructions for information returns say a payer that should have withheld and did not may become liable for the amount it failed to collect. For most self-managed boards the first choice is the right one. Make the W-9 a condition of the first payment, write it into the purchase order, and hold the check until the form comes in. Withholding is for the cases where that failed: the work is done, the invoice is real, and the vendor still will not fill out the form. These are federal rules, so they work the same way in Texas, Florida, Colorado and every other state, though governing documents and state law can add steps. This is general education, not tax or legal advice. In a real dispute with a vendor, ask the association's tax preparer.

When the 24 percent rule applies to a vendor

Three facts decide it. The number is missing. IRS Publication 1281 treats a TIN as missing when none was given, or when it has more or fewer than nine digits or contains a letter. A vendor who writes 'applied for' gets no grace period. The 60-day window for a pending number covers interest and dividends, and Publication 1281 says nonemployee compensation is subject to backup withholding immediately. The payment is reportable. Section 3406(b)(6) of the Internal Revenue Code counts a service payment only once the year's total to that payee reaches the Form 1099 threshold in section 6041(a). For payments made after December 31, 2025, that threshold is $2,000, and the 2026 Form 1099-NEC instructions use $2,000 or more. If the association was required to file a 1099 for the same payee the year before, the statute counts payments from the first dollar. The payee is not exempt. Payees the W-9 lists as exempt, such as most corporations, enter an exempt payee code on the form, and that settles it. A sole proprietor, or a single-member LLC owned by one person, is not exempt. An example. The association pays a handyman $1,500 in March with no W-9 on file. That payment alone is under $2,000, so nothing is withheld. In June he bills $3,000 for gutter work. The year's total is now $4,500, so the June payment is reportable: the association withholds $720 and sends him $2,280.

Put the rule in writing before the next invoice

A board that decides this one vendor at a time will give in the first time a popular contractor pushes back. Adopt a short payment rule at an open meeting instead. Sample motion: 'Move that the association require a signed IRS Form W-9 from every vendor that is not a corporation before any payment is released; that the treasurer hold payment until the form is received; and that if a vendor still refuses after completed work, the treasurer withhold 24 percent of each reportable payment as federal backup withholding, deposit it as the IRS requires, and report it at the next board meeting.' Then build it into hiring. Put one line in every purchase order and contract: 'Payment requires a signed IRS Form W-9 on file with the association.' Ask for the form when the contract is signed, not when the invoice lands. Publication 1281 calls this the initial solicitation, and it is the first of up to three requests the IRS expects before it will excuse a 1099 filed without a number. If the TIN still has not arrived, mail a first annual request by December 31 of the year you started paying the vendor (January 31 of the next year if that was December), and a second by December 31 of the following year. Keep a copy of each. Our guide on whether an HOA has to send 1099s to vendors covers who gets a form and when it is due.

Withholding, depositing and reporting the money

Once you withhold, the money is federal tax the association is holding, not association money. Treat it that way. 1. Calculate 24 percent of the reportable payment and pay the vendor the rest. Show the withholding on the check stub or payment memo so the vendor sees it. 2. Post the withheld amount to its own liability account, such as 'Federal backup withholding payable', so it never looks like cash the board can spend. 3. Deposit it electronically. The Form 945 instructions allow EFTPS, IRS Direct Pay or the association's IRS business tax account, and they bar combining these deposits with Form 941 payroll deposits. If the association's total for the year stays under $2,500, the instructions say no deposits are required during the year and the tax can be paid with the return. Above that, a first-year filer is a monthly depositor, and Publication 15 sets the monthly deadline at the 15th of the following month. A board that cannot tell where the year will land should deposit by the 15th anyway. 4. File Form 945, Annual Return of Withheld Federal Income Tax, under the association's EIN. For 2026 the instructions set the due date at February 1, 2027, or February 10, 2027 if every deposit was made on time. An association with no backup withholding for the year does not file one. 5. Report the amount in box 4 of the vendor's Form 1099-NEC. The IRS general instructions for information returns say a payer that backup withholds must file the Form 1099 for that payee, and they say to keep copies for four years when backup withholding was imposed. The 1099-NEC goes to the vendor and the IRS by January 31. In 2027 that date is a Sunday, so the deadline moves to Monday, February 1.

When the IRS says the number on file is wrong

A W-9 in the file does not end the matter if the name and number do not match IRS records. After the 1099s are filed, a small payer gets Notice CP2100A listing each mismatch. Publication 1281 runs the clock from the notice date or the date you received it, whichever is later. - Compare the list to your records first. If the association typed the number wrong, fix your records and use the right number on future 1099s. No B notice goes out in that case. - If your records match the notice, mail the vendor a First B notice with a blank W-9 within 15 business days. The outer envelope must say 'IMPORTANT TAX INFORMATION ENCLOSED' or 'IMPORTANT TAX RETURN DOCUMENT ENCLOSED'. Publication 1281 says the number may not be collected by phone. - If no signed W-9 comes back, start withholding no later than 30 business days after the notice date. Stop within 30 calendar days after the signed form arrives. - A second notice about the same vendor within three calendar years calls for a Second B notice, with no W-9 enclosed. This time the vendor must send a copy of their Social Security card, or IRS Letter 147C for an EIN, before withholding can stop. The CP2100A does not say whether it is the first or second notice for that vendor. Publication 1281 puts the tracking on the payer, so keep every notice and a copy of every B notice in the vendor's file for at least three years. Our guide on responding to an IRS notice sent to an HOA covers the other letters a treasurer is likely to open.

Wording the board can copy

The request, sent with the contract or the first invoice: 'Before we can release payment for the work at the pool house, we need a signed IRS Form W-9 for your business. A blank form is attached. Federal rules require the association to withhold 24 percent of payments to vendors who do not give us a taxpayer identification number, and we would rather pay you in full. Please return it by March 15.' The notice that goes with a reduced payment: 'We have not received a Form W-9. Under federal backup withholding rules we withheld 24 percent ($720) from this $3,000 payment and will deposit it with the IRS. It will appear in box 4 of your Form 1099-NEC, and you report it on your own return as tax withheld. We will stop withholding once we receive a signed W-9.' The line for the minutes: 'The treasurer reported $720 in federal backup withholding taken from one vendor payment under the board's W-9 rule and deposited on July 14.'

A sample timeline for a vendor who never sends the form

- March 2: contract signed and W-9 requested with it. - March 20: first payment of $1,500. The year's total is under $2,000, so it is paid in full and a second request goes out. - June 10: invoice for $3,000. The total is now $4,500, so the treasurer withholds $720, pays $2,280 and sends the notice above. - By July 15: $720 deposited through EFTPS. - December 31: first annual request for the TIN mailed, with a copy in the vendor file. - February 1, 2027: Form 1099-NEC with $720 in box 4 to the vendor and the IRS, and Form 945 filed (February 10 is allowed if every deposit was on time). - December 31, 2027: second annual request, if the vendor is still being paid.

Mistakes boards make

Paying the whole invoice and planning to sort it out at year end. A vendor who would not fill out a W-9 in June will not fill one out in January, and the association can end up owing the tax it should have kept back. Withholding the money and leaving it in the operating account. It is federal tax. Deposit it or set it aside for the Form 945. Calling the vendor for the number after a CP2100A. The B notice goes by mail, and the reply has to come back in writing. Using the old $600 figure. For payments made after December 31, 2025, both the 1099-NEC threshold and the backup withholding trigger use $2,000. Keeping it from the board. Report each withholding, deposit and refusal in the treasurer's report so the next treasurer inherits a paper trail instead of a surprise.

Sources

These guides are general education for HOA boards and residents, not legal, tax, or financial advice. Rules vary by state and by your community's governing documents - check with a professional for your situation.

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