1099 Filing in 2026: The New $2,000 Rule, Explained

For payments made in 2026, a business generally files Form 1099-NEC or 1099-MISC when it pays a non-employee $2,000 or more in the year, up from $600 for 2025 payments. Royalties ($10) and gross proceeds paid to attorneys ($600) keep their old thresholds. Card and payment-app payments are reported on Form 1099-K by the processor instead.

Last reviewed September 23, 2026

2026 is the first year of a new 1099 threshold. The One Big Beautiful Bill Act raised the reporting threshold for most Form 1099-NEC and 1099-MISC payments from $600 to $2,000, for payments made after December 31, 2025. The forms you file in early 2027 are the first ones under the new rule, and the old $600 figure still applies to anything you're catching up on for 2025.

This guide explains who gets a 1099 now, what didn't change, and the dates and filing system to plan for. To check a specific payment, use our 1099 checker.

What changed for 1099s in 2026?

Under IRC §6041(a), as amended by OBBBA section 70433, the threshold is now "$2,000 or more in any calendar year" for payments made after December 31, 2025. The IRS confirms the change in the Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026) and Publication 1099 (2026).

Three details matter:

• It follows the payment date, not the filing date. A contractor you paid in December 2025 is under the old $600 rule, even though the form is filed in 2026. Payments made on or after January 1, 2026 use $2,000.
• It's "or more". Paying exactly $2,000 means a 1099 is required.
• It will be indexed. For calendar years after 2026, the $2,000 figure is adjusted for inflation and rounded to the nearest $100. Expect the 2027 figure to be announced separately.

The threshold for backup withholding follows the same $2,000 figure (IRC §3406(b)(6)).

What are the 1099 thresholds for 2025 and 2026?

Source: IRC §§6041, 6045(f), 6050N and 6050W; Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026).

Who do I need to send a 1099-NEC to?

The instructions give four conditions. You generally report a payment as nonemployee compensation if:

1. You paid someone who is not your employee.
2. You paid for services in the course of your trade or business.
3. You paid an individual, partnership, estate or, in some cases, a corporation.
4. You paid that payee at least $2,000 during 2026 (at least $600 during 2025).

The total is per payee, for the year. Three $800 invoices from the same designer add up to $2,400, which is over the threshold.

Things that generally don't need a 1099-NEC or 1099-MISC:

• Personal payments. A nanny or a repair to your own home isn't a business payment. (Household employees follow separate rules.)
• Goods and merchandise. The instructions exclude payments for merchandise, telephone, freight, storage and similar items. If a vendor also performed services, the service part may be reportable.
• Employee wages. Those go on Form W-2.
• Rent paid to a real estate agent or property manager. The agent reports the rent paid over to the owner.
• Payments made by card or through a payment app, which are reported on Form 1099-K (see below).

The difference between the two forms is covered in 1099-NEC vs 1099-MISC: Which Form Do You Need?.

Do I send a 1099 to a corporation or an LLC?

Corporations: generally no. Payments to C and S corporations, including LLCs that have elected to be taxed as a corporation, are generally exempt. The exceptions, from the Instructions for Forms 1099-MISC and 1099-NEC, are reportable even when the payee is a corporation:

• Attorneys' fees (1099-NEC) and gross proceeds paid to attorneys (1099-MISC box 10). The corporate exemption doesn't apply to legal services.
• Medical and health care payments (1099-MISC box 6), including to professional corporations.
• Cash payments for fish purchased for resale (box 11).
• Substitute payments in lieu of dividends or tax-exempt interest (box 8).
• Payments for services by a federal executive agency.

LLCs: usually yes. A single-member LLC that's disregarded for tax, or a multi-member LLC taxed as a partnership, is not covered by the corporation exception. Only an LLC that has elected corporate tax treatment is. The LLC's Form W-9 tells you which it is. We explain how to read it in Do I Send a 1099 to an LLC?.

What about payments by card, PayPal, Venmo or Zelle?

The IRS instructions are clear on the main rule: payments made with a credit card or payment card, and certain other payments including third-party network transactions, are reported on Form 1099-K by the payment settlement entity. They are not reported by you on Form 1099-NEC or 1099-MISC.

• Card processors report card payments regardless of amount.
• Third-party settlement organizations (TPSOs), meaning payment apps and online platforms, report only when a payee's payments exceed $20,000 and exceed 200 transactions in the year. OBBBA restored this threshold retroactively, so the $600 phase-in that had been planned never took effect (IRC §6050W(e)).

Bank-to-bank payments are different. Checks, cash, ACH and wire transfers are yours to report. The Instructions for Form 1099-K say automated clearing houses don't qualify as TPSOs. Zelle moves money directly between bank accounts. The IRS pages we checked don't name Zelle specifically, so the careful approach is to treat Zelle payments like bank transfers: if they meet the threshold, you file the 1099-NEC. Our 1099 checker groups Zelle with checks, cash, ACH and wire for this reason. More detail: PayPal, Venmo, Zelle and Cards: Who Files the 1099?

Why do I need a W-9 from every contractor?

Form W-9 is how a payee gives you their correct taxpayer identification number (TIN), legal name and tax classification. The current revision is March 2024. Collect it before you pay.

• It tells you whether the corporation exception might apply (the tax classification box).
• It gives you the TIN you need to file.
• If a payee doesn't give you a TIN, you generally must start backup withholding at 24% on reportable payments (Pub. 1099 (2026)), and deposit and report it.

Keep W-9s securely. Don't email TINs in plain text. The IRS also offers a TIN Matching e-service for payers who want to check name/TIN combinations before filing.

When are 1099s due for 2026 payments?

The statutory dates are January 31, February 15, February 28 and March 31. Several fall on a weekend or holiday in 2027, so they move to the next business day: January 31, 2027 is a Sunday, February 15, 2027 is Washington's Birthday, and February 28, 2027 is a Sunday.

Extensions are limited. Form 8809 gives an automatic 30-day extension to file most information returns, but Pub. 1099 (2026) says no automatic extension is available for Form 1099-NEC. Extensions to furnish recipient copies use a separate form (Form 15397) and aren't automatic.

Do I have to e-file my 1099s, and what is IRIS?

E-filing is required if you file 10 or more information returns in total during the calendar year (T.D. 9972; Pub. 1099 (2026)). The count is aggregate across form types. For example, 6 Forms W-2 plus 4 Forms 1099-NEC is 10, so you must e-file.

IRIS replaces FIRE. Pub. 1099 (2026) says that beginning with tax year 2026 (the 2027 filing season), the Information Returns Intake System (IRIS) will be the only IRS intake system for information returns, and the older FIRE system shuts down in 2026. IRIS includes a free online taxpayer portal where you can key in forms or upload a .csv file, file up to 100 forms per submission, download recipient copies, request automatic extensions and file certain corrections.

To use IRIS you need an IRIS Transmitter Control Code (TCC). Pub. 1099 (2026) says a typical TCC application is processed within 45 business days, though times vary. If you plan to e-file yourself in January 2027, apply now. If you use accounting software or a filing service, check whether it files through IRIS on your behalf.

What are the penalties for late 1099s?

Penalties apply separately for failing to file with the IRS and for failing to furnish the recipient copy. For returns due in 2027 (tax year 2026 forms), Rev. Proc. 2025-32 sets these amounts per return:

Larger businesses (gross receipts over $5 million) have higher annual maximums. Penalties may be reduced or waived where there was reasonable cause. The practical point: filing late is generally much cheaper than not filing, and correcting within 30 days is cheapest.

Do states have different 1099 rules?

Yes, and they don't all follow the new $2,000 figure. Based on our state research, where each rule below was checked against an official state source:

States without a personal income tax on wages, such as Florida, Nevada, Washington, South Dakota, Tennessee, New Hampshire and Alaska, generally have no state 1099-NEC filing.

In Wisconsin and Alabama, you could owe a state 1099 even when no federal form is due. Our 1099 checker flags this when you enter your state and the payee's state, and our state 1099 rules pages cover each state with sources.

What should I do before the end of 2026?

1. List every contractor you paid in 2026, with totals by payment method. Card and payment-app payments can come out of the count.
2. Collect missing W-9s now, while people still answer email.
3. Check who crossed $2,000 (and your state's threshold if it's lower).
4. Apply for an IRIS TCC if you'll e-file yourself, or confirm your software or provider files through IRIS.
5. Put February 1, 2027 in the calendar for 1099-NEC.
6. Catch up any 2025 forms you missed. Those use the $600 threshold.

Our free Contractor Payment Tracker + 1099 Readiness Sheet (download the spreadsheet) logs payments, totals them per contractor and flags who likely needs a 1099 and who's missing a W-9.

If you'd rather hand it off, RAHA's We File All Your 1099s service covers W-9 collection and TIN review, preparation and e-filing of 1099-NEC and 1099-MISC, recipient copies, and state filings where your state requires them. It's priced per form, with the price quoted upfront. See our bookkeeping and tax filing services, or book a free consultation.

Frequently asked questions

Is the 1099 threshold $2,000 for 2026?

Yes, for most Form 1099-NEC and 1099-MISC payments made in 2026. It's $600 for payments made in 2025. Royalties stay at $10 and gross proceeds paid to attorneys stay at $600.

I paid a contractor $1,900 in 2026. Do I need a 1099?

Not federally, because $1,900 is under $2,000. Check your state: Wisconsin, for example, still uses $600, and Alabama $1,500.

Does the $2,000 threshold apply to 1099s I file in January 2026?

No. Forms filed in early 2026 report 2025 payments, which use $600. The $2,000 threshold starts with forms for 2026 payments, filed in early 2027.

Do I have to send a 1099 to an LLC?

Usually yes, unless the LLC has elected to be taxed as a C or S corporation. Check the tax classification on its Form W-9.

Do I send a 1099 to a contractor I paid through PayPal?

Generally no, if you paid through PayPal's business or goods-and-services payments. The payment company reports it on Form 1099-K. Payments by check, ACH, wire, cash or Zelle are yours to report.

What if I file 1099s late?

Penalties start at $60 per return if filed within 30 days of the due date (for returns due in 2027) and rise the later you file. Filing as soon as possible generally keeps the penalty lower.

Is the $2,000 threshold permanent?

The $2,000 figure applies to 2026. For calendar years after 2026 it's adjusted for inflation and rounded to the nearest $100.

Sources

• IRC §6041 (information at source; $2,000 threshold): https://www.law.cornell.edu/uscode/text/26/6041
• IRC §6050N (royalties): https://www.law.cornell.edu/uscode/text/26/6050N
• IRC §6050W (Form 1099-K): https://www.law.cornell.edu/uscode/text/26/6050W
• IRS, Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026): https://www.irs.gov/pub/irs-pdf/i1099mec.pdf
• IRS, Publication 1099 (2026), General Instructions for Certain Information Returns: https://www.irs.gov/pub/irs-pdf/p1099.pdf
• IRS, Instructions for Form 1099-K: https://www.irs.gov/instructions/i1099k
• IRS, Understanding your Form 1099-K: https://www.irs.gov/businesses/understanding-your-form-1099-k
• IRS, About Form W-9: https://www.irs.gov/forms-pubs/about-form-w-9
• IRS, E-file information returns with IRIS: https://www.irs.gov/filing/e-file-information-returns-with-iris
• IRS, Rev. Proc. 2025-32 (penalty amounts): https://www.irs.gov/pub/irs-drop/rp-25-32.pdf
• State sources: as linked in the state table above.

This guide provides general information for educational purposes and is not tax, legal or accounting advice. Consult a qualified professional before acting.