If your business pays contractors, landlords or other vendors, you may need to send them a Form 1099 after the year ends, and file a copy with the IRS. The rules are simple once you know which questions to ask. The biggest news for 2026 is a much higher reporting threshold.

What changed for 2026

For payments made in 2026, the reporting threshold for Form 1099-NEC and Form 1099-MISC is $2,000. For payments made in 2025, it was $600. So a contractor you paid $1,500 in 2026 generally no longer needs a 1099-NEC, where the same payment in 2025 would have needed one.

The IRS says the $2,000 amount will be adjusted for inflation in later years. Always check the threshold for the year the payments were made, not the year you are filing. You can confirm the current rules on IRS.gov (opens in a new tab).

1099-NEC or 1099-MISC?

  • Form 1099-NEC is for payments for services by someone who is not your employee, such as a freelancer, consultant or independent contractor.
  • Form 1099-MISC covers other payments, such as rent for an office or equipment, prizes and some other kinds of income.

Employees never get a 1099. They get a Form W-2 through payroll.

Who usually does not need a 1099

  • Corporations. Payments to C corporations and S corporations are generally not reported. Attorneys and law firms are the main exception, even when they are incorporated.
  • Payments for goods. Buying products or materials is generally not reported on a 1099.
  • Card and app payments. If you paid a vendor by credit card or through a payment app, the card company or app usually reports it instead, so you generally do not send a 1099 for that payment.

One more rule to know: if you took backup withholding from a payment, a 1099 is required whatever the amount.

Collect a W-9 before you pay

Form W-9 gives you a vendor's legal name, tax classification and taxpayer identification number. Ask for it before the first payment, when the vendor is keen to get paid. Chasing W-9s in January is one of the most common year-end headaches, and the W-9 also tells you whether the vendor is a corporation.

Filing dates for 2026 payments

  • February 1, 2027: Form 1099-NEC to contractors and to the IRS, and most Forms 1099-MISC to recipients.
  • March 1, 2027: paper Forms 1099-MISC to the IRS.
  • March 31, 2027: Forms 1099-MISC filed electronically with the IRS.

Dates can move when they fall on a weekend or holiday, so check IRS.gov or our tax deadline countdown for the latest.

How to stay ready all year

  1. Set up every new vendor with a W-9 before the first payment.
  2. Mark which vendors may need a 1099 in your accounting software, so their payments are tracked as you go.
  3. Record how you paid each vendor, so card and app payments are easy to separate.
  4. Review the vendor totals once in the fall, while there is still time to collect missing details.

Not sure about a particular vendor? The 1099 vendor checker asks a few quick questions and builds a list you can share with your CPA.

The bottom line

The higher $2,000 threshold means fewer forms for many small businesses, but the basics stay the same: know who you paid, how you paid them and whether they are a corporation, and have a W-9 for everyone.

We collect W-9s and track 1099 vendors all year as part of our accounts payable service.

General information only, not tax or legal advice. Dates and thresholds can change; check IRS.gov, and ask your CPA what applies to your business. Questions? Book a free 30-minute consultation.