1099s for 2026 payments: what the new $2,000 threshold changes

What changed

• $2,000 threshold. The One Big Beautiful Bill Act, signed on July 4, 2025, raises the threshold for most 1099-NEC and 1099-MISC reporting to $2,000 for payments made after December 31, 2025.
• Inflation indexing. From 2027, the $2,000 is adjusted for inflation each year, rounded to the nearest $100.
• Backup withholding follows the same $2,000 threshold.
• Form 1099-K goes back to more than $20,000 and more than 200 transactions for payment apps and online marketplaces. The lower thresholds that had been scheduled no longer apply.
• Royalties keep their own, much lower threshold.

Payments made in 2025, reported in early 2026, used the old $600 threshold.

What hasn't changed

• The threshold is per payee, per calendar year, so totals still need tracking all year.
• Collect Form W-9 before the first payment. A contractor paid $500 in January can be well over $2,000 by December.
• Forms 1099-NEC go to recipients and the IRS by January 31. For 2026 payments that is Monday, February 1, 2027, because January 31 falls on a Sunday.
• If a business files 10 or more information returns in total for the year, it must file them electronically.
• States set their own rules. Some have their own 1099 thresholds or filing requirements and don't automatically follow federal changes.

A year-end checklist for clients

• Run a 2026 vendor payments report and flag every payee approaching $2,000.
• Chase missing W-9s now, not in January.
• Check how each vendor was paid. Card and payment-app payments are reported by the processor on 1099-K, not by the payer on 1099-NEC.
• Confirm state requirements for each state where clients have payees.
• Book the 1099 run for the first two weeks of January.

How we help

We collect and reconcile contractor data in QuickBooks Online or Xero, chase W-9 gaps and prepare 1099s for your review. Your firm keeps the sign-off and the filing.

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