Overview
The IRS information-return guidance now states that, for payments made in 2026, the reporting threshold for Forms 1099-NEC and 1099-MISC is $2,000 rather than $600.
What has changed?
Payments of $600 or more triggered a Form 1099-NEC or 1099-MISC for payments made before 2026.
Payments totaling $2,000 or more trigger reporting for payments made after December 31, 2025. The $5,000 threshold for direct sales of consumer products is unchanged. Gross proceeds paid to attorneys reported in Form 1099-MISC box 10 still use a $600 threshold, and backup withholding reporting applies regardless of amount.
Who is affected?
Businesses and other payers that pay independent contractors or make other reportable payments.
When does it take effect?
Applies to payments made after December 31, 2025. The threshold is adjusted for inflation beginning in calendar year 2027.
What this means for you
- Fewer small payments to contractors require a 1099, but you still need accurate records of everything you pay.
- Collecting a Form W-9 from vendors remains good practice, and backup withholding rules still apply.
- Some payments are subject to different thresholds, so check the form instructions for each payment type.
Recommended next steps
- Update your accounts payable process with the $2,000 threshold for 2026 payments.
- Keep collecting W-9 forms from new vendors.
- Review the current-year Instructions for Forms 1099-MISC and 1099-NEC before filing.
General educational guidance, not tax advice. Schedule a consultation to discuss your situation.
Important dates
- January 1, 2026Payments made after December 31, 2025 use the $2,000 threshold
- January 1, 2027Inflation adjustments begin in calendar year 2027