The new 1099 rules for 2026 bring the first meaningful change to contractor reporting in years: the threshold for issuing Form 1099-NEC and 1099-MISC jumps from $600 to $2,000. If you hire freelancers, subcontractors, or trades help, this affects who you have to send forms to — but the timing matters, and it is easy to apply it to the wrong year. Here is what changed, who still gets a 1099, and the deadlines to keep on your radar.
What is the new 1099 threshold for 2026?
The reporting threshold for Form 1099-NEC and 1099-MISC rises from $600 to $2,000 for payments made after December 31, 2025. In plain terms, for money you pay out during 2026, you generally only need to issue these forms to a payee if you paid them $2,000 or more across the year. A handful of categories keep their own separate rules — for example, gross proceeds paid to attorneys are still reportable at $600, and royalties at $10 — but for typical contractor and vendor payments, $2,000 is the new line.
The $600 threshold had been in place for decades, so this is the first real change many business owners have ever seen. It should mean noticeably fewer forms — the occasional handyman or one-off subcontractor you paid a few hundred dollars will often fall below the new line. The threshold is also set to adjust for inflation in future years, so it should keep pace rather than freezing in place the way the old $600 figure did.
Do the new 1099 rules apply to the forms I file in January 2026?
No — and this is the point that trips up the most business owners. The 1099s you prepare in January 2026 report payments you made during 2025, so the old $600 threshold still applies to that batch. The new $2,000 threshold does not kick in until you report 2026 payments, which happens in early 2027. So for the upcoming filing season, keep doing exactly what you have always done: issue a 1099-NEC to anyone you paid $600 or more in 2025.
Who needs to receive a 1099 in 2026?
You generally issue a 1099-NEC to any unincorporated contractor, freelancer, or service provider you paid $2,000 or more for business services during 2026. Beyond the dollar amount, the usual rules still apply:
- Business payments only — personal payments are never reported on a 1099.
- Services, not goods — you report payments for labor and services, not for physical products or merchandise.
- Corporations are usually exempt — payments to C-corps and S-corps generally do not require a 1099, with limited exceptions such as attorneys.
- Cash and check, not card — payments made by credit card or through a third-party platform are reported by the processor on a 1099-K, not by you.
The most important habit here is collecting a Form W-9 before you pay a new contractor. Chasing down tax IDs in January, after the work is done and the invoice is paid, is where 1099 season goes sideways. Our Payroll & Certified Payroll team helps businesses set up clean contractor onboarding so W-9s and 1099s are handled correctly all year, not scrambled at deadline.
What is the new 1099-K threshold for 2026?
Third-party payment platforms — PayPal, Venmo for business, Stripe, and similar — are required to issue a Form 1099-K only when a recipient exceeds both $20,000 in gross payments and 200 transactions in a calendar year. This reinstates the long-standing threshold after several years of proposed and delayed lower limits that would have sent a 1099-K to almost anyone selling online or taking digital payments. Remember, though: the form is just a reporting trigger. Income is taxable whether or not a 1099-K is issued, so business revenue collected through these platforms still belongs on your return — and if the same payment is reported on both a 1099-K and a 1099-NEC, be careful not to count it twice.
When are 1099s due?
Form 1099-NEC is due to both the recipient and the IRS by January 31. Form 1099-MISC is generally due to recipients by January 31 and to the IRS by late February on paper, or the end of March if you file electronically. Because January 31 comes up fast after the holidays, the businesses that handle 1099s smoothly are the ones that keep vendor records current and W-9s on file throughout the year rather than reconstructing everything in the final week.
What should you do now?
A few steps keep you ready for both filing seasons:
- File your 2025 1099s at the $600 threshold in January 2026 — the new rule does not apply yet.
- Collect W-9s from every new contractor before their first payment.
- Track payments by vendor and method so you can tell card and platform payments apart from cash and check.
- Update your bookkeeping to flag who is crossing the $2,000 line for 2026 reporting.
The higher threshold is genuinely good news — fewer forms for most small businesses — as long as you apply it to the right year and keep your contractor records clean.