Short Answer

To release a North Carolina personal injury settlement, insurers commonly require IRS Form W-9. You must give the correct payee name (matching the settlement check), address, federal tax classification (individual, LLC, corporation, etc.), the right taxpayer identification number (SSN or EIN), and your signed certification. The TIN must match the payee on the check; if the check names your law firm, the firm’s EIN goes on the W-9.

Understanding the Problem

In North Carolina personal injury cases, insurers usually will not issue settlement funds until they receive a completed W-9 from the payee. You want to know exactly what to put on the W-9 so the insurer can cut the check without delay. Here, the insurer and your representative agreed on a figure within your demand range, and the insurer asked for a W-9 with a tax ID to issue payment.

Apply the Law

Insurers use Form W-9 to collect the taxpayer identification and payee details they need to issue the check and satisfy federal information-reporting rules. This is not a court filing, and there is no North Carolina statute that changes what goes on a federal W-9. The core requirement is that the W-9 exactly matches the intended payee on the settlement check and includes a valid SSN or EIN, correct tax classification, mailing address, and your signed certification. Practically, the insurer’s claims department will not release funds until it receives a valid W-9 and the signed release.

Key Requirements

• Correct payee name: Use the exact name that will appear on the settlement check (you personally, your law firm, your LLC, or other payee).
• Accurate tax classification: Check the right box (individual/sole proprietor, C corporation, S corporation, partnership, trust/estate, or LLC with its tax type).
• Valid TIN: Provide the SSN for an individual or the EIN for a business, trust, or estate that is the actual payee.
• Current mailing address: Where the check and any future tax forms should be mailed.
• Signed certification: Sign and date to certify the TIN is correct and you are not subject to backup withholding (unless you are).
• Multiple payees/attorneys: If the check names a law firm or there are split payments, the insurer may require separate W-9s (for the client and the firm).

What the Statutes Say

• IRS Form W-9 (Request for Taxpayer Identification Number and Certification) - explains what information is required and who should use it.
• 26 U.S.C. § 104(a)(2) (Exclusion for personal physical injury damages) - general rule that compensatory damages for physical injuries are excluded from income.
• IRS About Form 1099-MISC - covers reporting of certain settlement-related payments (e.g., interest, punitive damages, gross proceeds to attorneys).
• IRS About Form 1099-NEC - covers reporting of nonemployee compensation to attorneys when applicable.

Analysis

Apply the Rule to the Facts: Because the insurer is ready to pay, submit a W-9 that matches the intended payee on the settlement check. If the check is to you personally, use your name, individual tax classification, your SSN, and your address. If the check is to your attorney’s trust account or to a law firm, the firm’s W-9 with its EIN may also be required, and the insurer might request both your W-9 (for your portion) and the firm’s (for reporting rules).

Process & Timing

1. Who files: The payee (you or your law firm). Where: Submit the signed W-9 to the insurer’s claims department/adjuster (often via secure email or portal). What: IRS Form W-9 plus the signed settlement release. When: Provide it immediately after agreement so the insurer can verify the TIN and issue payment.
2. The insurer verifies the TIN and finalizes the payment request; issuance timelines vary by insurer and can be delayed by name/TIN mismatches.
3. The insurer issues the settlement check to the named payee(s); if reportable, tax Forms 1099 are typically mailed the following January.

Exceptions & Pitfalls

• Name/TIN mismatch: If the payee name and TIN do not match IRS records, payment can be delayed or subject to backup withholding.
• Wrong tax box for LLCs: If you are an LLC, mark the LLC box and indicate whether you are taxed as a disregarded entity, partnership, or corporation.
• Attorney involvement: Settlements that route through a law firm may require both the client’s and the firm’s W-9s; ask the adjuster which payees they need.
• Non-U.S. persons: If you are not a U.S. person for tax purposes, do not use a W-9; the insurer may ask for a W-8 form instead.
• Special payees: Estates and trusts generally use an EIN; minors typically use the minor’s SSN unless a court-approved structure requires otherwise.
• Out-of-date address: Use a current address so any required 1099 forms are delivered correctly.

Talk to a Personal Injury Attorney

If you’re finalizing a settlement and unsure how to complete the W-9 or whose TIN to use, our firm can help you avoid delays and reporting issues. Call us today.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.