The short answer
Only for people you paid $2,000 or more during 2026. For payments made after December 31, 2025, Public Law 119-21 raised the threshold for Form 1099-NEC and most Form 1099-MISC boxes from $600 to $2,000, measured per payee across the calendar year.1,2,3 For payments made in 2027 it rises to $2,100.4
Some thresholds did not move: royalties are still reported at $10 and gross proceeds paid to attorneys at $600. Payments you made by card or through a payment app are reported by the processor on Form 1099-K, not by you.3 Forms 1099-NEC for 2026 are due to recipients and the IRS by Monday, February 1, 2027, because January 31 falls on a Sunday.3,8
| Item | Rule for payments made in 2026 |
|---|---|
| Form 1099-NEC (nonemployee compensation) | $2,000 or more paid to the payee during the year3 |
| Form 1099-MISC: rents, prizes and awards, other income, medical and health care payments | $2,000 or more3 |
| Royalties | $10 or more (unchanged)3 |
| Gross proceeds paid to an attorney (1099-MISC box 10) | $600 or more (unchanged)3 |
| Card and payment-app payments | Not on your 1099; the processor reports them on Form 1099-K3 |
| Form 1099-K threshold for payment apps and online marketplaces | Over $20,000 and over 200 transactions1,10 |
| Form 1099-NEC due (recipients and IRS) | February 1, 20273,8 |
| Form 1099-MISC due to the IRS | March 1, 2027 on paper; March 31, 2027 electronically3,11 |
| Threshold for payments made in 2027 | $2,1004 |
What exactly changed?
Section 70433 of Public Law 119-21, the 2025 budget reconciliation law often called the One Big Beautiful Bill Act, replaced $600 with $2,000 in section 6041(a) of the Internal Revenue Code for payments made after December 31, 2025.1 The same section tied the Form 1099-NEC rule in section 6041A and the backup-withholding rule in section 3406 to that amount, so all three move together.1,7
Two consequences follow. First, this is a 2026 change. Anything you paid in 2025 was reported in early 2026 under the old $600 rule, so January 2027 is the first filing season where the higher threshold matters. Second, the amount is now indexed for inflation after 2026. Rev. Proc. 2026-35, released November 5, 2026, sets it at $2,100 for payments made in 2027.2,4
The IRS has proposed regulations that would conform the existing regulations to the new amounts. They are not final yet.9
Who gets a Form 1099-NEC for 2026 payments?
You file Form 1099-NEC for each person you paid at least $2,000 during 2026, in the course of your trade or business, for services performed by someone who is not your employee.3 The test is cumulative: add up everything you paid that payee during the calendar year, and exactly $2,000 counts.2,3 Four $600 payments to the same contractor total $2,400 and require a form. If you reimburse a contractor’s travel without requiring an accounting, the reimbursement counts toward the $2,000 along with the fee.3
The familiar exclusions still apply. Wages to employees go on Form W-2. Personal payments that aren’t made in the course of your business aren’t reportable. Payments to corporations, including LLCs taxed as C or S corporations, are generally exempt, but payments for legal services and for medical and health care services are reportable even when the recipient is a corporation.3
| Payee and payment | 2026 total | Form 1099 from you? |
|---|---|---|
| Freelance bookkeeper, sole proprietor, paid by check | $1,800 | No. Below $2,000. |
| Subcontractor, single-member LLC owned by an individual, no corporate election, paid by ACH | $6,500 | Yes. Form 1099-NEC. |
| Law firm organized as a professional corporation, fees for legal services | $2,400 | Yes. Form 1099-NEC; the corporate exemption doesn’t cover legal fees. |
| Equipment repair company taxed as an S corporation | $3,000 | Generally no. Payments to corporations are exempt. |
| Web designer paid by credit card | $4,000 | No. Card payments are reported on Form 1099-K. |
| Individual landlord for office space | $24,000 | Yes. Form 1099-MISC, box 1 (rents). |
Which 1099 thresholds did not change?
The $2,000 figure covers nonemployee compensation on Form 1099-NEC and, on Form 1099-MISC, rents, prizes and awards, other income, medical and health care payments, crop insurance proceeds and certain deferred-compensation amounts.3 Other categories keep their own thresholds:
- Royalties are still reportable at $10.
- Gross proceeds paid to an attorney, such as a settlement payment sent to a claimant’s lawyer, are still reportable at $600 in box 10 of Form 1099-MISC. That $600 figure comes from the regulations under section 6045(f), which neither the 2025 law nor the proposed regulations change.13
- Direct sales of $5,000 or more of consumer products for resale are still reported.
- Cash payments for fish bought for resale stay at $600, and fishing boat proceeds are reportable in any amount.
- Backup withholding: if you withheld on a payment, you file for it regardless of the amount.3
Form 1099-B is unaffected. Forms 1099-INT and 1099-DIV keep their $10 thresholds, but their former $600 categories, such as interest paid in the course of a trade or business and liquidation distributions, moved to $2,000 as well.6
What if I paid by credit card, PayPal or Venmo?
Payments you make by credit card, debit card or through a third-party payment network are reported on Form 1099-K by the card processor or payment platform, and they are not reported on Form 1099-NEC or 1099-MISC.3 That was true before 2026 and still is. Current regulations already excuse you even when the platform’s own threshold means no Form 1099-K is issued, and the proposed regulations keep that rule.9,14 Checks, cash, ACH and wire transfers stay on your side of the line.
The same law settled the Form 1099-K threshold that had been in limbo since 2021. Section 70432 restored the rule that a payment app or online marketplace reports a payee only when that payee receives more than $20,000 across more than 200 transactions in the year, and made it retroactive so the $600 level never took effect.1,10 If you see $600 cited for Form 1099-K, the source predates the 2025 law.
When are 2026 Forms 1099 due?
| Form | Copy to recipient | Filed with the IRS |
|---|---|---|
| 1099-NEC | February 1, 2027 | February 1, 2027, paper or electronic |
| 1099-MISC | February 1, 2027 (February 16, 2027 if box 8 or box 10 has an amount) | March 1, 2027 on paper; March 31, 2027 electronically |
The usual dates are January 31 and February 28, but both fall on a Sunday in 2027, and a deadline that lands on a weekend or legal holiday moves to the next business day.3,8 February 15, 2027 is Washington’s Birthday, which is why the box 8 and box 10 recipient date is February 16.11
If you file 10 or more information returns of all types combined, you must file electronically. Forms W-2 count toward the 10 and corrected returns don’t, so an employer with six W-2s and four 1099s is already there.6,16 For this filing season the IRS Information Returns Intake System (IRIS) is the only IRS e-filing channel for Forms 1099; the older FIRE system is retired. The IRS says a transmitter control code application is typically processed within 45 business days, though processing times vary, so a business that has never e-filed directly should apply now or use a filing service.6
Late or missing forms carry a penalty for each return and a separate penalty for each recipient copy. For returns due in 2027 the amounts are $60 per form if corrected within 30 days, $130 if corrected by August 1, and $340 if later or never filed, with higher penalties for intentional disregard.5
Do I still need a W-9 from every contractor?
Yes. Collect it before the first payment. Form W-9 gives you the payee’s legal name, taxpayer identification number and tax classification, which is how you know whether a form is required at all. Backup withholding is the enforcement tool: if a payee hasn’t furnished a TIN, or the IRS has notified you that the TIN is incorrect, you withhold 24% of reportable payments and send it to the IRS.6,7
The backup-withholding trigger moved with the threshold, with one wrinkle that catches people. A payment is subject to backup withholding if your payments to that payee reach the threshold this year, or if you were required to file an information return for that payee for the prior year.7 A contractor you had to report at $600 for 2025 is therefore subject to backup withholding from the first dollar in 2026 if you still don’t have a TIN for them.
If I’m the contractor and don’t get a 1099, is the income tax-free?
No. The threshold decides whether the payer files a form, not whether the income is taxable. The IRS is explicit that income must be reported even when no Form 1099-NEC, 1099-MISC or 1099-K is issued.12 The practical effect of the higher threshold is that freelancers and consultants will receive fewer forms and will need their own records of what they were paid.
What to do before January
- Run a vendor report for January 1 through December 31, 2026, totaled by payee and by payment method, and take out card and payment-app payments.
- Flag every payee at $2,000 or more, plus attorneys receiving $600 or more of gross proceeds and anyone paid $10 or more in royalties.
- Request missing W-9s now, while vendors are still responsive.
- Decide how you’ll file. With 10 or more returns in total, you must e-file through IRIS or a filing service.
- Calendar February 1, 2027 for Forms 1099-NEC and most recipient copies of 1099-MISC (February 16 if box 8 or 10 is used), and March 1 (paper) or March 31 (electronic) for 1099-MISC to the IRS.
- Set your accounting system’s 1099 threshold to $2,000 for 2026 and $2,100 for 2027.
All of this is easier when the books tag each vendor’s tax classification and payment method as payments are made. If yours don’t, that’s the first fix. State filing requirements can differ from the federal rules, so confirm your state’s thresholds before assuming $2,000 applies to state copies.