What is the 1099-NEC reporting threshold for 2026?

For payments made in calendar 2025 and earlier, the threshold is $600. The One Big Beautiful Bill Act raised the information-reporting threshold to $2,000 beginning with payments made in calendar 2026, indexed for inflation in later years. So the forms filed in January 2026 (for 2025 payments) use $600; forms filed in January 2027 (for 2026 payments) use $2,000.

When are 1099-NEC forms due?

Form 1099-NEC is due to both the recipient and the IRS by January 31 following the payment year, with no automatic extension. Form 1099-MISC follows a later IRS filing deadline, but recipient copies are still generally due January 31. Most filers must file electronically once they cross the IRS's aggregate e-file threshold.

Do corporations get 1099s?

Generally no — payments to C and S corporations are exempt from 1099-NEC and most 1099-MISC reporting. The notable exceptions are payments to attorneys, which are reportable even if the law firm is incorporated, and certain medical payments. An LLC's treatment follows its tax classification on the W-9: an LLC taxed as a corporation is exempt; one taxed as a sole proprietorship or partnership is not.

Do payments by credit card need a 1099-NEC?

No. Payments made by credit card or through third-party payment networks are reported by the processor on Form 1099-K, not by the payer. Issuing a 1099-NEC for card-paid amounts double-reports the contractor's income. Only payments by cash, check, ACH, or wire count toward your 1099-NEC totals.

What if a contractor refuses to provide a W-9?

You may still owe a 1099 — file with the information you have rather than skip it. More importantly, a missing or incorrect taxpayer identification number triggers backup withholding: you must withhold a flat percentage (set by statute; see the IRS backup-withholding guidance) from future payments and remit it. The clean solution is refusing to issue first payment until the W-9 arrives.

The 1099 season playbook: from W-9 to January 31

1099 season is won in March, not January. Businesses that collect a Form W-9 from every vendor before the first check goes out spend a quiet afternoon in January filing forms. Businesses that don't spend that January chasing tax ID numbers from vendors who have stopped answering email, under a hard deadline with no automatic extension.

This playbook lays out the whole system: what to collect and when, who actually gets a form (fewer vendors than you fear, more than you might guess), the reporting thresholds — which changed under the OBBBA and now depend on the payment year — the NEC/MISC split, the filing mechanics, and how to fix the ones you get wrong.

The system runs all year: W-9s at onboarding

The single highest-leverage habit in this article: no W-9, no first payment. The W-9 gives you the vendor's legal name, taxpayer identification number, and — critically — its federal tax classification, which is what tells you whether the corporation exemption applies. Collected at onboarding, it is a thirty-second ask; collected in January, it is a collections project against people who have no reason to hurry.

The stick behind the W-9 is backup withholding. If a payee fails to furnish a TIN (or the IRS notifies you of a mismatch), you are required to withhold a flat statutory percentage from reportable payments and remit it — the current rate is on the IRS's backup withholding page rather than in your memory. Almost no small business wants to administer that, which is why "no W-9, no payment" is the standard policy.

Pair the W-9 with ledger hygiene: flag every 1099-eligible vendor in your accounting system when you set them up, and route their payments through a contract-labor or professional-fees account. The full vendor file — W-9, agreement, invoices, certificate of insurance — is covered in /bookkeeping/payroll-compliance/contractor-file-checklist.

Who gets a 1099-NEC?

Form 1099-NEC reports payments for services performed by nonemployees in the course of your trade or business. Work through the decision in order:

The who-gets-one decision table:

Question	If yes	If no
Was the payment for services (not goods, rent, or products)?	Continue	No 1099-NEC (goods and merchandise are not reportable)
Was it in the course of your trade or business?	Continue	No 1099 (personal payments are not reportable)
Is the payee a C or S corporation (per the W-9)?	Generally no 1099 — except attorneys, who are reportable regardless of incorporation	Continue
Was payment by credit card or payment network?	No 1099-NEC — the processor reports on 1099-K	Continue
Did total cash/check/ACH payments for the year reach the threshold ($600 through 2025; $2,000 for 2026+ payments)?	File 1099-NEC	No form required (you may still file voluntarily)

Common inclusions people miss: the landlord's handyman working on your office, the freelance designer, the outside bookkeeper, the incorporated law firm (attorneys are always reportable), the LLC taxed as a partnership. Common exclusions people over-file: product purchases, incorporated IT vendors, anyone paid entirely through a card processor, and your employees — an employee's pay belongs on a W-2, never a 1099, and if you are unsure which a worker is, resolve that first at /bookkeeping/payroll-compliance/employee-vs-contractor.

The threshold, carefully dated

The OBBBA, enacted July 4, 2025, changed the information-reporting threshold — and because 1099s are filed the January after the payment year, the two regimes overlap in confusing ways. Date everything by payment year:

Payment year	Threshold	Forms filed in
2025 and earlier	$600	January of the following year (Jan 2026 for 2025 payments)
2026	$2,000	January 2027
2027 and later	$2,000, indexed for inflation	January of the following year

NEC versus MISC

Nonemployee compensation moved from Form 1099-MISC box 7 to the resurrected Form 1099-NEC in 2020, and the split still trips filers. The working rule: services by nonemployees → NEC; almost everything else reportable → MISC.

Form 1099-MISC still covers, among other things: rents paid to your landlord (unless paid to a corporation or through an agent who reports), prizes and awards, medical and health-care payments, and gross proceeds paid to attorneys — a settlement check to a law firm goes in the MISC gross-proceeds box, while fees for the firm's legal services to you go on an NEC. Royalties are reportable on MISC at a much lower threshold, historically $10; the OBBBA's $2,000 figure applies to the general reporting thresholds for 2026-and-later payments — check the current form instructions for each box's threshold rather than assuming one number covers all.

Where a typical small business's January filings actually land — illustrative, but a fair picture of the mix:

Forms filed by an illustrative 20-vendor small business

Illustrative composition; the point is that NEC dominates and MISC is the exception.

Filing mechanics and the January 31 deadline

Form 1099-NEC is due to both the recipient and the IRS by January 31, whether you file on paper or electronically, and there is no automatic 30-day extension for NEC (extensions of time to file are available only for narrow hardships, and extensions to furnish recipient copies are separate and equally narrow). 1099-MISC gives you until later in the season for the IRS copy, but recipient copies are still generally due January 31 — practically, treat January 31 as the deadline for everything and be done.

Mechanics, in the order you should do them the first week of January:

Run a vendor payment report for the closed year, filtered to 1099-tagged vendors, cash/check/ACH payments only.
Reconcile totals against the ledger — the contract-labor account should roughly tie to the sum of your NEC boxes; investigate gaps.
Match every vendor to a W-9 on file; chase the stragglers immediately, not on the 28th.
File electronically. Most businesses now must: the e-file mandate applies once your aggregate information returns cross the IRS's threshold (10 or more, in recent years), and the IRS's free IRIS portal or any commercial filing service handles it. Electronic filing also transmits most state copies through the combined federal/state program, though some states require direct filing — verify yours.
Furnish recipient copies by January 31 — mail or, with consent, electronic delivery.
Keep the filing confirmations with the year's payroll records.

Penalties for late or incorrect information returns are per-form, tiered by how late you correct, and indexed annually — small per-form numbers that multiply fast across a vendor list, with much larger penalties for intentional disregard. The tiering is one more argument for filing something reasonable on time and correcting it, rather than filing late and perfect.

Corrections: when January's forms turn out wrong

Errors surface in February when contractors read their forms. The correction process depends on the error:

Wrong dollar amount, wrong box, or a form that shouldn't have been filed: file a corrected form — check the CORRECTED box, report the right figures (or zeros to void), and refurnish the recipient. E-file corrections through the same channel you filed originally.
Wrong payee TIN or name: this is a two-step correction on paper — first a return zeroing out the original incorrect-payee form, then a new original with the right information. Filing services automate the sequence; do not simply file a second form and hope.
A vendor you missed entirely: file an original, late. The per-form penalty is smallest when you correct within 30 days of the deadline, so speed matters more than embarrassment.

There is no deadline pressure to rush a correction into error, either — get the corrected figure right the first time, because serial corrections on the same payee invite IRS matching notices for the contractor.

The calendar, compressed

All year: W-9 before first payment; tag vendors; route to contract-labor accounts.
October: scan the vendor list for missing W-9s while vendors still want to be paid.
First week of January: run the report, reconcile, chase final W-9s.
By January 31: file NEC with the IRS, furnish all recipient copies. Same date W-2s are due — see the full year's deadlines at /bookkeeping/payroll-compliance/compliance-calendar-small-business.
February: field questions, file corrections promptly.

Run this system for one full year and 1099 season stops being a season. It becomes a morning.