For the first time since 1954, the number that decides whether you have to send someone a 1099-NEC has moved. It was $600. For payments made in 2026 it is $2,000, and from 2027 it will rise with inflation.
That is a large change and it is very new, which means two things. Most of what you will find written about 1099-NEC still says $600. And if you receive these forms rather than send them, fewer of them are going to arrive — which is a bigger problem than it sounds.
What actually changed
The threshold applies to payments made after December 31, 2025. If you paid a contractor $1,400 over the course of 2026 for work they did for your business, you do not file a 1099-NEC for them. Last year, you would have.
The scale of it is worth a moment. The IRS and Treasury estimated that for tax year 2024, around 3.3 million payers filed 18.8 million Forms 1099-NEC reporting amounts of at least $600 but under $2,000. Those forms largely stop existing.
If you receive 1099s, read this part twice
Fewer forms will arrive in early 2027. Nothing about what you owe has changed.
A 1099-NEC has never been what makes income taxable. It is a copy of a report someone else sent about you. Your obligation is to report what you were paid, and that obligation applies to the $800 job exactly as it applies to the $8,000 one.
The risk is practical rather than moral. A lot of self-employed people have been reconstructing their year in January out of the envelopes that turn up — not as a decision, just as what happens when nothing else is written down. If that has been working for you, it is about to stop working, quietly, and in your favor in a way that will look like under-reporting.
The fix is the same one as always: your own record of what you invoiced and what cleared. If you keep one, the threshold change costs you nothing but a smaller pile of mail.
Who you have to send one to
File a 1099-NEC for each person you paid $2,000 or more during the year, in the course of your business, for either of these:
- Services performed by someone who is not your employee, including any parts and materials they supplied.
- Payments to an attorney.
“In the course of your business” is doing real work in that sentence. Paying a plumber $3,000 to fix the pipes in your house is not reportable. Paying the same plumber $3,000 to fix the pipes in the premises you rent for your business is.
Who you do not
Four exclusions cover almost every case people get wrong.
Corporations. Payments to a corporation, including an LLC treated as a C or S corporation, are generally not reportable. The exception is attorneys: legal fees of $2,000 or more are reported whatever the firm’s structure.
Anything paid by card or through a platform. This is the one that produces double-counted income. Payments made by credit card, payment card, or a third-party network are reported by the payment settlement entity on Form 1099-K, and are explicitly not reportable by you on a 1099-NEC. If you pay a designer by card and also send them a 1099-NEC, the IRS sees the same money twice and the designer spends a February explaining it.
Who reports the payment depends on how you sent it
Same contractor, same $3,000, two completely different obligations.
Tax-exempt organizations and government bodies. Not reportable.
Employees. If the person is genuinely your employee, the form is a W-2 and the rules are entirely different. Getting this distinction wrong is expensive in a way that getting a 1099 threshold wrong is not.
January 31, for both copies
Form 1099-NEC is due on or before January 31 — the copy you give the contractor and the copy you file with the IRS, on the same date, paper or electronic. If January 31 falls on a weekend or a holiday it moves to the next business day, and that is the only flexibility in it.
This trips people who are used to the older, gentler 1099-MISC schedule, which is still February 28 on paper and March 31 electronically. Two forms, similar names, a month of difference.
One more that catches nobody until it does: if you withheld federal income tax from someone under the backup withholding rules, you file a 1099-NEC for them regardless of the amount. The $2,000 floor does not apply.
The W-9 problem
You cannot file a 1099-NEC without the recipient’s taxpayer identification number, and there is exactly one good moment to ask for it: before you pay them the first time.
In January, the contractor you used in March has changed their email, finished the job, and has no particular reason to prioritize your paperwork. Form W-9 is the standard way to collect the name, address and TIN, it takes them two minutes, and nobody is offended by being asked at the start.
The new threshold makes this slightly harder to judge, not easier, and the trap is obvious once you see it: you cannot always tell in March whether someone will cross $2,000 by December. Collect the W-9 from anyone who might. The cost of holding one you never use is nothing.
Where this stops
This is the federal rule for the most common case: a self-employed person who paid a few contractors. It is not the whole of information reporting. Rent, royalties, prizes and gross proceeds paid to attorneys go on a 1099-MISC with its own thresholds; direct sales of consumer products for resale have a separate $5,000 rule; and several states run their own filing requirements on their own dates.
If you are filing more than a handful, or you are unsure whether someone you paid is a contractor or an employee, that is the point to involve an accountant. The second question in particular is not a paperwork question.
BrassWell tracks what you were paid and what you paid out, which is the record both halves of this depend on. It does not file 1099s.
Questions, answered
What is the 1099-NEC threshold for 2026?
$2,000. The threshold increased from $600 for payments made after December 31, 2025, and will be adjusted for inflation for calendar years after 2026. The $600 figure had been in place since 1954.
When is Form 1099-NEC due?
January 31, for both the recipient copy and the copy filed with the IRS, whether you file on paper or electronically. If that date falls on a Saturday, Sunday or legal holiday, the due date moves to the next business day. Form 1099-MISC is due later: February 28 on paper, or March 31 electronically.
Do I send a 1099-NEC for payments made by credit card?
No. Payments made with a credit card or payment card, and third-party network transactions, are reported on Form 1099-K by the payment settlement entity and are not subject to reporting on Form 1099-NEC or 1099-MISC. Filing one anyway causes the same income to be reported twice.
Do I have to report income if I do not receive a 1099-NEC?
Yes. A 1099-NEC is a report someone else files about payments they made to you; it is not what makes the income taxable. With the threshold rising to $2,000, fewer forms will be issued, but the income remains reportable in full.
Sources
- Instructions for Forms 1099-MISC and 1099-NEC — IRS. The $2,000 threshold and its effective date, the January 31 filing deadline, the corporation and attorney rules, the Form 1099-K exclusion, and the backup withholding exception.
- Am I required to file a Form 1099 or other information return? — IRS. The trade-or-business test that separates a reportable payment from a personal one.
- About Form W-9, Request for Taxpayer Identification Number — IRS. The standard way to collect the name, address and taxpayer ID a 1099-NEC cannot be filed without.
- General Instructions for Certain Information Returns — IRS. The 2026 general rules covering exceptions, tax-exempt payees and the separate 1099-MISC deadlines.
Looking for more?
Related guides
- Your first year self-employedIncluding why to collect W-9s in month one.
- How to get paid fasterInvoicing that leaves a record worth keeping.
- What you can actually deductContractor payments are a deduction; here is the rest.
- Quarterly estimated taxesThe January 15 payment lands two weeks before this deadline.
Elsewhere on BrassWell
- All guidesEverything we’ve written, in one place.
- Support Center48 answers, written the way these guides are.
- How BrassWell worksIncome, buckets, tax set-aside and invoicing.
- Ask us directlyA person replies, 9 AM–5 PM Pacific, Mon–Fri.
General information, not tax advice. The figures here are the federal information-reporting rules for payments made in 2026 and were checked against the IRS instructions. State filing requirements are separate. Whether someone you pay is a contractor or an employee is a legal question with consequences well beyond this form, and is worth asking a professional about.