What changed, and from when
Public Law 119-21, section 70433, raised the minimum reporting amount and made it apply to payments made after 31 December 2025. The IRS's 2026 instructions for Forms 1099-MISC and 1099-NEC put it this way: for tax years beginning after 2025, the minimum threshold for reporting certain payments, and for backup withholding on them, increased to $2,000 and may be adjusted for inflation beginning in calendar year 2027.
The key word is payments. What matters is when you paid the contractor, not when the work was done or invoiced. The forms you filed in early 2026, for 2025 payments, used $600. The forms you file in early 2027, for 2026 payments, use $2,000.
The thresholds at a glance
| Payment type | Paid in 2025 | Paid in 2026 |
|---|---|---|
| Nonemployee compensation to a contractor (1099-NEC box 1) | $600 | $2,000 |
| Attorneys' fees for legal services (1099-NEC box 1) | $600 | $2,000 |
| Rents (1099-MISC box 1) | $600 | $2,000 |
| Other income, prizes and awards (1099-MISC box 3) | $600 | $2,000 |
| Gross proceeds paid to an attorney, such as a settlement (1099-MISC box 10) | $600 | $600 |
| Fish purchased for resale | $600 | $600 |
| Royalties (1099-MISC box 2) | $10 | $10 |
The inflation adjustment starts in calendar year 2027 and is rounded to the nearest $100, so check the threshold again for payments made in 2027.
Due dates for the 2026 forms
Section 6071(c) requires Form 1099-NEC to be filed with the IRS on or before 31 January, and the instructions move a date that falls on a Saturday, Sunday or legal holiday to the next business day. Because 31 January 2027 is a Sunday, Forms 1099-NEC for 2026 payments are due Monday, 1 February 2027. Recipient copies follow the same date.
Form 1099-MISC has later IRS filing dates: 28 February if filed on paper or 31 March if filed electronically, again moved forward when the date lands on a weekend. The recipient statements for Form 1099-MISC are still due by 31 January, moved to the next business day when that is a weekend, so do not wait for the March date to send them.
Electronic filing is required once you have 10 or more information returns in total for the year, counting all types together, under the rules effective for returns filed on or after 1 January 2024.
What the higher threshold does not change
- The contractor still reports all of their income. The threshold decides whether you send a form, not whether the money is taxable.
- Your deduction is the same. A $1,500 payment to a contractor is still a business expense on your books and your return, with or without a 1099.
- You still need the contractor's details. Collect a Form W-9 before you pay, because you will not always know in January whether someone crossed $2,000.
- Backup withholding now uses the same $2,000 threshold for payments after 2025.
- Only payments made in the course of your trade or business are reportable. Personal payments are not.
- Payments made by credit card, payment card or through a third-party payment network are reported by the payment settlement entity on Form 1099-K, and the IRS instructions say they are not reported on Form 1099-NEC or 1099-MISC.
If you receive 1099s
For sole proprietors and single-member LLC owners on the receiving end, the change means fewer forms arriving in 2027 for small jobs. It does not change what goes on your Schedule C. Income is reportable whether or not a form was issued, and the IRS makes the same point about Form 1099-K: no matter the amount reported, you must report all income.
In practice, fewer forms means your own records matter more. Build the income figure from your deposits and invoices, then use the forms you do receive as a cross-check.
A year-end routine for payers
Most 1099 problems in January are records problems from the rest of the year. A short routine in December prevents most of them.
- 1.Pull a list of every non-employee you paid during the year from your books, not from memory.
- 2.Separate payments made by card or payment app, which are generally reported on 1099-K by the platform.
- 3.Total each payee's payments by type and compare each total to the right threshold for the year paid.
- 4.Check that you have a current W-9 for everyone at or over the threshold, and chase missing ones before year end.
- 5.Decide who prepares and files the forms, and whether you need to file electronically at 10 or more returns.
Where we come in
If your bookkeeping is with us, the payee totals come straight out of reconciled books, and the year-end review is a natural place to check them. If the books are behind, catching them up comes first, since a 1099 is only as accurate as the payment records behind it. We give you a scope and a price in writing before anything starts.
Figures on this page were checked against the IRS and Massachusetts sources listed alongside on 28 Sep 2026. They change — confirm the current amount before relying on one.
General information for owner-led businesses, not advice for your specific situation. Tax and accounting rules change, and how they apply depends on facts particular to your business. Talk to us — or to another qualified professional — before acting on anything here.
