Form W-9 for medical and health care payments
Medical and health care payments are reported in box 6 of Form 1099-MISC, and that box is one of the few places where the corporate payee exception simply does not apply. A medical group organized as a professional corporation receives 1099s anyway, so the W-9 requests never stop.
Box 6, the threshold, and the corporate carve-out
- Form and box
- Form 1099-MISC box 6, medical and health care payments
- Threshold
- $2,000 or more to one provider, for payments made after December 31, 2025
- Corporations
- Reportable. The corporate exception does not reach medical or health care services, including services provided by professional corporations
- Who has to file
- Any business paying a provider in the course of its trade or business, and health, accident and sickness insurers paying under their programs
- Who the recipient is
- Where payment goes to a corporation, the corporation is listed as the recipient rather than the individual clinician
- Signature on the W-9
- A correct TIN is required; no signature is required for this payment type. Signature rules
- No certified TIN on file
- 24% backup withholding on the reportable payment
Why a professional corporation still receives a 1099
The corporate payee exception is the reason most corporations can invoice the same customer for years without a single information return arriving in January. It is broad and it is genuinely useful. It also has holes in it, and medical and health care payments make up one of the two largest, alongside legal services and gross proceeds paid to an attorney. The instructions for Forms 1099-MISC and 1099-NEC put it directly: the exemption from issuing a Form 1099-MISC to a corporation does not apply to payments for medical or health care services provided by corporations, including professional corporations. There is no election, no code on Line 4 and no organizational structure that gets a medical practice out of it.
So the P.C., the PLLC, the imaging center and the solo dentist are in the same position: they hand out W-9s, and 1099s come back.
The one thing the corporate form does change is whose name appears on the form. Where the payment goes to a corporation, the instructions direct the payer to list the corporation as the recipient rather than the individual who provided the services. That matters for TIN matching, because the name and number pair being tested is the entity’s, and a payer who has been handed an individual clinician’s SSN for a group practice will fail. Where the exception stops
Who counts as a provider
The statutory phrase is broad: each physician or other supplier or provider of medical or health care services. It reaches well past doctors, and it catches ordinary businesses that have nothing to do with health care but happen to buy a health care service.
| The payment | Box 6? |
|---|---|
| Your business pays a clinic for pre-employment physicals or drug screening | Yes. A health care service purchased in the course of your trade or business |
| A health, accident or sickness insurer pays a physician under its program | Yes. The instructions name insurers specifically |
| A practice pays a locum tenens physician who bills through a corporation | Yes, and the corporation is the recipient |
| You pay a dentist, chiropractor, physical therapist, laboratory or imaging center | Yes |
| You pay a supplier of medical equipment or appliances | Generally yes, as a supplier of medical or health care services |
| You pay a pharmacy for prescription drugs | No. The instructions say reporting is not required |
| You pay a tax-exempt hospital, or one owned and operated by a government | No |
| You pay a consultant who works in the health care sector | No. Consulting is nonemployee compensation on Form 1099-NEC box 1a |
| A payment under a flexible spending arrangement or health reimbursement arrangement | Generally exempt from section 6041 reporting |
| Salary to a clinician you employ | No. Wages belong on a Form W-2 |
This is the part employers miss. A construction company that sends its crews for annual physicals, a trucking firm paying for DOT medical examinations, a school district contracting with a nurse practitioner: all of them are making medical and health care payments in the course of a trade or business, and all of them need a W-9 from the provider. The reporting obligation follows the nature of the service purchased.
The whole payment is reportable, including the parts that look like goods
Ordinarily, payments for merchandise sit outside 1099-NEC reporting, and separating goods from services on an invoice is a routine part of a payables process. What is outside reporting
Box 6 does not work that way. The instructions state that payments to persons providing health care services often include charges for injections, drugs, dentures and similar items, and that in these cases the entire payment is subject to information reporting. You do not carve out the cost of the materials. A dental invoice covering both the extraction and the denture is reported in full, which makes box 6 amounts run larger than payers expect and makes reconciliation against a provider’s own revenue figures harder than it looks.
What sits outside box 6
- Prescription drugs bought from a pharmacy, where the instructions say reporting is not required. That removes an enormous volume of transactions from the system.
- Payments to a tax-exempt hospital or extended care facility.
- Payments to a hospital or extended care facility owned and operated by the United States or its territories, a state, the District of Columbia, or any of their political subdivisions, agencies or instrumentalities.
- Flexible spending and health reimbursement arrangements. Payments made under an arrangement treated as employer-provided coverage under section 106 are generally exempt from section 6041 reporting.
- Wages to an employed clinician, which run through payroll instead.
- Anything you pay as a private individual. Your own copay is not made in the course of a trade or business, so it is not reportable by you.
Completing the W-9 as a provider
5 is available to a corporation and accomplishes nothing here, since medical payments are reportable regardless. Many practices leave it blank to avoid implying an exemption that does not exist. The codesCredentialing packets ask for both, which is how the two end up transposed. The only number the W-9 collects is the taxpayer identification number, and the pair the IRS tests is the Line 1 name against the Part I number. Sending an individual provider’s SSN for payments that will be reported to a group EIN produces a mismatch, a CP2100 notice to the payer, and a B notice back to you. How matching works
If you run the practice, you are also a payer
Every practice is on both sides of this. The forms you collect are the ones that cause trouble in January, because a vendor who has already been paid has no reason to answer the phone.
Ask during vendor setup, before the first payment
Make a completed W-9 part of vendor setup and of every contract you sign, from the billing company to the medical waste hauler. How to request one
Sort the payments into the right boxes
Locum tenens physicians, contract nurses, reading radiologists and interpreters providing clinical services are box 6 payments, reportable even to a corporation. Your IT contractor and your marketing agency are 1099-NEC box 1a. Rent on the suite is 1099-MISC box 1. Rent reporting
Run TIN matching before filing season
The IRS service checks a name and number pair against its records, and a group practice with fifty vendors will usually find at least one problem while there is still time to fix it. TIN matching
Withhold where you have no valid certification
24% comes off the reportable payment until a correct TIN arrives. A payer that should have withheld and did not can be liable for the amount. When a vendor will not send one
Keep the forms and the requests
Retain the signed W-9s, and keep evidence of the dates you asked. That record is the entire reasonable cause argument if a penalty is ever proposed. Penalties
For payments made after December 31, 2025 the box 6 threshold is $2,000, up from $600, and it is indexed for inflation from 2027. A practice that set its accounting system to flag vendors at $600, back when that was the rule, is now flagging far more vendors than it needs to. What changed
Frequently asked questions
We are a professional corporation. Why do we keep getting 1099s?
Because box 6 is carved out of the corporate payee exception. The instructions state that the exemption from issuing Form 1099-MISC to a corporation does not apply to payments for medical or health care services provided by corporations, including professional corporations. Incorporating changes nothing here.
Does a payment to a physician go in box 6 or on a 1099-NEC?
Box 6 of Form 1099-MISC, where the payment is for medical or health care services. Form 1099-NEC box 1a covers other services performed for your trade or business. A physician you pay to give employee physicals is a box 6 payment; a physician you pay to speak at a conference is closer to nonemployee compensation.
Do we report what we paid the pharmacy?
Not for prescription drugs. The instructions say you are not required to report payments to pharmacies for prescription drugs, which spares a great many practices and employers a large reporting exercise. Other payments to that same pharmacy for health care services are a separate question.
Our company pays a clinic for pre-employment physicals. Do we file?
If the total paid to that clinic reaches $2,000 for the year, yes. These are payments for health care services made in the course of your trade or business, and no exception applies because you are not a health care business yourself.
Can a practice decline to send a W-9 because it is exempt from reporting?
Two things are being confused. Exemption from some 1099 reporting is not exemption from certifying a TIN, and medical payments are reportable regardless. A payer with no certified TIN on file has to withhold 24% from the reportable payment, which means the practice is refusing a form in order to be paid 76 cents on the dollar.
General information, not tax advice. This page explains a federal tax form in plain English. It is not legal, tax, or accounting advice, and W9Form.org is not affiliated with the IRS. Verify everything against the official Form W-9 page on IRS.gov and speak to a licensed professional about your own situation. How we source and review these pages.