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In putting together a prequalification form, general contractors aim to understand more about a subcontractors reputation, financial health, and ability to complete projects of a particular size, complexity, location, and duration.
All subcontractors should be providing you with an IRS W9 form. This documentation lets you know the type of company the subcontractor is (corporation, LLC, sole proprietor, etc), as well as their tax identification number or Social Security number if they are an individual.
Highlights and key takeaways A form W-9 is used to collect a contractors tax information. A form 1099 is used to document any payments that a client has made to a contractor, if those payments total more than $600. Both forms are mandatory.
Subcontracting is the practice of assigning, or outsourcing, part of the obligations and tasks under a contract to another party known as a subcontractor. Subcontracting is especially prevalent in areas where complex projects are the norm, such as construction and information technology.
Main Requirements: (1) Registered Company; (2) BEE Affidavit; (3) ID Documents of Directors.
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In determining the employment tax status of a worker, the IRS considers three categories of evidence: Behavioral control, Financial control, and Relationship of the parties.
CaliforniaMust have a Class C license for specialty trades and subcontractors. ColoradoAll requirements set forth at the municipal level. FloridaNeed a Division II certification. HawaiiMust have a Class C license. IllinoisPlumbing and roofing subcontractors need a state license, while others are on a local level.

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