1099-NEC Filing Requirements and Deadlines for 2026 Payments

Every January the same question lands in our inbox: "Which of my vendors need a 1099, and did the rules change again?" For 2026 payments the answer is yes, and in your favor. The One Big Beautiful Bill Act raised the 1099-NEC and 1099-MISC reporting threshold from $600 to $2,000, which knocks a lot of small vendors off your list. The deadline, the e-file rule and the penalties did not get any friendlier.

This guide covers the forms you will file in early 2027 for money paid during calendar year 2026. If you are cleaning up 2025 forms, the old $600 threshold still applies.

Who gets a 1099-NEC (and who does not)

Form 1099-NEC reports nonemployee compensation: what you paid an individual, sole proprietor, partnership or LLC taxed as one of those for services performed in your trade or business. Contract labor, subcontractors, freelancers, commissioned reps who are not employees, your bookkeeper if she is not on payroll. If the total for the year reaches $2,000, you owe that person a form and the IRS a copy.

The exclusions matter as much as the rule. No 1099-NEC for payments to a C corporation or S corporation, which is why the W-9 asks the vendor to check an entity box. None for goods or inventory, none for personal payments, and none for anyone you pay through payroll; that is what the W-2 is for. If you are unsure whether a worker belongs on payroll or on a 1099, settle that first with our guide to the W-2 employee vs. 1099 contractor decision, because a 1099 does not make someone a contractor.

Two exceptions trip people up every year. Attorneys are always reportable, even when the firm is a corporation: fees go on a 1099-NEC, while gross proceeds paid to an attorney in a settlement go on 1099-MISC box 10. And medical and health care payments to a corporation go on 1099-MISC box 6.

The $2,000 threshold: what changed and when

OBBBA, signed July 4, 2025, rewrote the reporting threshold for payments made after December 31, 2025. The IRS instructions for Forms 1099-NEC and 1099-MISC now read: for tax years beginning after 2025, the minimum threshold for reporting these payments, and for backup withholding on them, is $2,000, and it may be adjusted for inflation beginning in calendar year 2027. In plain terms: 2026 payments reported in January 2027 use $2,000; 2025 payments reported in January 2026 used $600; and the number will start creeping up with inflation after this year.

The threshold is per payee, per calendar year. A handyman you paid $700 in March and $1,400 in November gets a 1099-NEC because the total is $2,100. It is a floor, not a ceiling: you may file for a $1,500 vendor, and the vendor owes tax on the income either way. In our practice we tell clients to keep collecting W-9s from every service vendor regardless of size, because you rarely know in March who will cross $2,000 by December.

A related change: the same law restored the Form 1099-K threshold to more than $20,000 and more than 200 transactions. That is the processor's problem, not yours. If you pay a contractor by card or through PayPal's business checkout, the processor reports it and you leave it off your 1099-NEC. Zelle is the exception people miss: it moves money bank to bank and states plainly that it does not issue 1099-Ks, so Zelle payments count toward your 1099-NEC totals like checks and ACH.

Deadlines and filing rules for 2026 forms

The 1099-NEC has one date to remember: January 31, for both the recipient copy and the IRS copy, paper or electronic. Because January 31, 2027 is a Sunday, the IRS rule that moves a weekend due date to the next business day makes the practical deadline Monday, February 1, 2027. Plan to have the forms out the third week of January and treat that day as a cushion.

The 1099-NEC also lacks the safety valve most information returns have. Form 8809 gives an automatic 30-day extension for a 1099-MISC, but for the 1099-NEC (and the W-2) an extension is granted only on paper and only for reasons like a federally declared disaster, a fire, or the death or serious illness of the person responsible for filing. "Our bookkeeper was behind" does not qualify.

The 10-return e-file rule and IRIS

Since tax year 2023, any business required to file 10 or more information returns in a year must file them electronically, and the count is an aggregate across form types. Your W-2s count. A company with 7 employees and 3 contractor forms is at 10 and must e-file every one of them; mailing paper copies at that point is a penalty, not a filing. The IRS e-file information returns page lists every form in the tally.

The IRS built a free portal for this, the Information Returns Intake System (IRIS). It accepts the 1099-NEC and 1099-MISC and lets you key forms in by hand or upload a file. Most of our clients never touch it because their payroll or accounting software files the forms for a few dollars each. Either way, set up access early; IRIS requires an IRS account and a transmitter code, and January is not the month to discover the approval takes weeks.

W-9s, backup withholding and the vendor file

The 1099 process is won or lost in the vendor file, not in January. Get a signed Form W-9 from every service vendor before the first check clears; it gives you the legal name, the entity type and the taxpayer identification number. Make it a condition of onboarding in accounts payable, the same way you would not pay an invoice with no invoice number.

If a vendor refuses to give you a TIN, you are required to withhold 24% of the payment as backup withholding, send it to the IRS and report it on Form 945, per the IRS backup withholding rules. The vendor gets $760 of a $1,000 invoice and can claim the $240 on their own return. Explaining this once usually produces the W-9 quickly. Run names and numbers through the IRS TIN Matching tool before you file; a mismatch otherwise comes back months later as a CP2100 notice.

Worked example: a Tampa landscaping company

Consider a Tampa landscaping company with $1.4 million in revenue, eight W-2 employees, and these 2026 payments. A crew lead working as an independent subcontractor, paid $38,000 by check: 1099-NEC. A part-time bookkeeper, sole proprietor, paid $1,800: no form, under $2,000. An equipment repair shop organized as an S corporation, paid $9,500: no form, corporation. A law firm (a P.A.) paid $3,200 to chase an unpaid invoice: 1099-NEC, because the corporate exemption does not cover legal services. The landlord, an individual, paid $30,000 in rent: 1099-MISC box 1. A web designer paid $4,000 by company credit card: no form, the processor reports it on a 1099-K. A marketing freelancer paid $6,000 through Zelle: 1099-NEC, because Zelle is a bank transfer, not a payment network.

Result: three 1099-NECs and one 1099-MISC. Add eight W-2s and the company is at 12 information returns, so everything must be e-filed. Now the cost of getting it wrong. Suppose the owner forgets the Zelle freelancer and the attorney and files those two in April. Under Rev. Proc. 2025-32, for returns due in 2027 a form filed more than 30 days late but by August 1 costs $130, and the penalty applies separately to the IRS copy and the recipient copy: 2 forms x 2 copies x $130 = $520. Never filed, or filed after August 1, it is $340 per copy, or $1,360 for the two vendors. Intentional disregard is $690 per copy with no annual cap. The IRS penalties page keeps the current schedule.

What usually goes wrong

The most expensive mistake is not a missed form but a misclassified worker: someone who should have been on payroll all year now has a 1099-NEC with a large number on it, and that form is a signpost for both the IRS and Florida's reemployment tax auditors. The second is assuming every LLC is a corporation. An LLC can be taxed four different ways and only the W-9 tells you which; single-member LLCs and partnerships get a form.

Other patterns we see every January: reporting the card-paid portion of a vendor's total along with the checks; including expense reimbursements paid under an accountable plan; mailing paper forms when the 10-return rule required e-filing; and forgetting that Florida separately requires reporting independent contractors paid $600 or more to the Department of Revenue within 20 days, a state rule OBBBA did not change. Florida has no income tax and no state 1099-NEC or 1099-MISC filing, which is one thing you can cross off. Keep copies of what you filed, and the W-9s behind them, for at least four years; our guide to small business tax records covers the rest.

When to get help

If your vendor count is under a dozen and your bookkeeping is current, 1099 season is a half-day job in mid-January: pull the vendor report, match it to W-9s, e-file. It becomes a project when the books are behind, when the W-9 folder is thin, or when contractors and employees are doing similar work and you are not sure the labels are right. That last one deserves a conversation before you file anything.

Our payroll, W-2 and 1099 support service handles W-9 collection during the year, TIN matching, and e-filing of every 1099 and W-2 in January, alongside the filings covered in our employer's guide to payroll taxes. If you want a second set of eyes on your 2026 vendor list before year-end, request a 20-minute fit call and bring your vendor report.

Jenny Gao, CPA, EA

Founder of Balance Partners. Florida-licensed CPA and IRS Enrolled Agent with more than a decade of accounting and tax experience. Jenny writes and reviews every guide on this site. About Jenny

This article is general educational information for U.S. business owners and is not accounting, tax, legal, payroll or financial advice for your situation. Rules change and vary by entity, state and facts. Balance Partners, LLC does not provide audit, review or other attest services. Last reviewed September 14, 2026.