1099 threshold for 2026 and 2027

The 1099 threshold for 2026 is $2,000: a business sends a 1099-NEC only to a contractor it paid $2,000 or more during the year, where the old line was $600. The figure most pages leave out is the next one. On November 5, 2026 the IRS published the first inflation adjustment, and for payments made in 2027 the line is $2,100.

This page keeps those numbers in one place, by tax year and by form, with the source for each. It also covers how the total is counted, because that is where owners go wrong: the threshold is measured per payee, on payments made in the calendar year, by cash, check or bank transfer only. Who gets a form and the steps to file it are in when to send a 1099. Ledgerbrook keeps books and does not file returns, so take a borderline payment to the CPA who prepares yours.

The 1099 threshold by tax year

Payments made in	1099-NEC and most 1099-MISC boxes	Forms due to the contractor	Source
2025	$600	Feb 2, 2026	IRS instructions for 2025 forms
2026	$2,000	Feb 1, 2027	P.L. 119-21 §70433(a); Instructions for Forms 1099-MISC and 1099-NEC, Rev. Dec 2026
2027	$2,100	Jan 31, 2028	Rev. Proc. 2026-35 §3.52
2028 and later	Adjusted for inflation each year	Jan 31, or the next business day	IRC §6041(h)

The change came from section 70433 of the One, Big, Beautiful Bill Act (P.L. 119-21), which raised the §6041(a) threshold to a base of $2,000 “for payments made after December 31, 2025” (Rev. Proc. 2025-32, §2.15). The same section added §6041(h), which indexes that base for inflation in later years. Rev. Proc. 2026-35, released November 5, 2026, sets the first adjusted figure: “For payments made in calendar year 2027, the reporting threshold for payments described in § 6041(a) is $2,100.” The current form instructions, revised December 2026, still say only that the amount “may be adjusted for inflation beginning in calendar year 2027”, because they were written before the revenue procedure came out.

The year that matters is the year you paid, not the year the work was done or invoiced. A December 2026 invoice paid on January 6, 2027 is a 2027 payment and counts toward the $2,100 line, not the $2,000 one.

1099 thresholds by form for 2026 and 2027

Not every box moved. The increase applies to payments covered by §6041(a), and to the two rules that point at it: nonemployee compensation under §6041A(a)(2) and backup withholding under §3406(b)(6) (Rev. Proc. 2025-32, §2.15). Floors set by other code sections stayed where they were.

Form and payment	2025 payments	2026 payments	2027 payments
1099-NEC box 1a, nonemployee compensation, including attorney fees	$600	$2,000	$2,100
1099-MISC box 1, rents	$600	$2,000	$2,100
1099-MISC box 3, other income, prizes and awards	$600	$2,000	$2,100
1099-MISC box 6, medical and health care payments	$600	$2,000	$2,100
1099-MISC box 9, crop insurance proceeds	$600	$2,000	$2,100
1099-MISC box 2, royalties	$10	$10	$10
1099-MISC box 8, substitute payments in lieu of dividends or interest	$10	$10	$10
1099-MISC box 10, gross proceeds paid to an attorney	$600	$600	$600
1099-MISC box 11, fish purchased for resale, in cash	$600	$600	$600
1099-MISC box 7, direct sales of consumer products for resale	$5,000	$5,000	$5,000
1099-K from a payment app or marketplace	Over $20,000 and over 200 transactions	Same	Same
1099-K for card payments	No threshold	No threshold	No threshold

The 2026 column is from the Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026). The 2027 figures for the first five rows follow from the $2,100 in Rev. Proc. 2026-35 and the cross-references above; the IRS will print them in the 2027 instructions. The fixed floors in the lower rows are not tied to §6041(a), so the adjustment does not reach them. Interest and dividends paid by a business, on Forms 1099-INT and 1099-DIV, stay at $10 (Publication 1099).

The 1099-K rows are a different law. Section 70432 of the same act restored the $20,000 and 200-transaction test for payment apps and marketplaces, and card processors report every card payment with no minimum. That form comes from the processor, not from you, and why it rarely matches your deposits is covered in why your 1099-K doesn’t match your books.

How the $2,000 is counted

Three rules decide whether a payee is over the line, and all three come from the form instructions.

1. Per payee, for the whole year. Add up every payment to the same contractor from January 1 to December 31. Ten payments of $250 are $2,500 and need a form, even though no single payment came near the line.
2. Cash, check and bank transfer only. Payments made by credit card, debit card or a payment app “must be reported on Form 1099-K by the payment settlement entity” and “are not subject to reporting on Form 1099-MISC or Form 1099-NEC” (Instructions for Forms 1099-MISC and 1099-NEC). Leave them out of your total.
3. By the date paid. A cash-basis rule applies even if your books are on the accrual method: the payment counts in the year the money left.

A painting contractor paid four times shows how the rules interact:

Date	Paid by	Amount	Counts toward the 2026 total?
Mar 12, 2026	Check	900.00	Yes
Jul 8, 2026	Bank transfer	650.00	Yes
Oct 20, 2026	Business credit card	800.00	No, on the card company’s 1099-K
Jan 6, 2027	Check, for a December 28 invoice	500.00	No, a 2027 payment
Reportable for 2026		1,550.00	Under $2,000, no 1099-NEC

The owner paid this contractor $2,350 during 2026 and $2,850 for the year’s work, but the reportable total is $1,550, so no form is due. Had the October payment gone out by check, the total would be $2,350 and a 1099-NEC would be due by February 1, 2027. The January payment starts the 2027 total, which is measured against $2,100.

What the higher threshold does not change

• The income is still taxable. The threshold decides whether you file a form, not whether the contractor owes tax. A contractor paid $1,500 still reports $1,500.
• The expense still needs support. No form is due under the line, but the deduction still needs the invoice and the payment record. Below the line, those papers are the only record of the payment.
• Corporations are still exempt, with the same exceptions. Payments to a corporation generally need no form, except fees for legal services and, on the 1099-MISC, medical and health care payments (Instructions for Forms 1099-MISC and 1099-NEC). The full payee table is in when to send a 1099.
• Backup withholding follows the new line. Withholding 24% from a payee who gave you no taxpayer ID now keys to the same threshold, and if you withheld anything at all, the form is due “regardless of the amount of the payment” (Instructions for Forms 1099-MISC and 1099-NEC). How to collect the ID before it comes to that is in W-9 vs 1099.
• State rules are set by each state. A state that requires its own 1099 copy decides its own floor, and not every state has said whether it follows the federal $2,000. Check your state revenue department or ask your preparer before skipping a state copy.
• The deadlines are the same. For 2026 payments, the 1099-NEC goes to the contractor and the IRS by February 1, 2027. The 1099-MISC goes to the recipient by February 1, or February 16 if box 8 or box 10 is filled in, and to the IRS by March 1 on paper or March 31 electronically. Which payment goes on which form is in 1099-NEC vs 1099-MISC.

Keeping the totals ready in QuickBooks Online

A higher threshold does not make the year-end list easier to produce. The work is the same as before: knowing, per contractor, what you paid by check or bank transfer. Three habits keep that number ready.

Collect the W-9 before the first payment, whatever the expected amount. You cannot tell in March which vendors will cross $2,000 by December. A one-off $400 job often becomes six of them, and a form you could have filled in from a W-9 becomes a chase in January.

Track every service vendor as a contractor, not only the big ones. QuickBooks Online counts payments toward the 1099 totals only for vendors set up to track them, and it leaves card and payment-app payments out on its own, as long as they were recorded against the card account (Intuit: create and file 1099s). The setup steps are in when to send a 1099.

Run the 1099 report in October, not January. Filter it to contractors with $1,500 or more of reportable payments. Those are the ones who may cross the line before December 31, and the ones whose W-9s and payment records you want checked while there is time to fix a miscoded payment.

Common questions about the 1099 threshold

How much can I pay a contractor without a 1099 in 2026?

Up to $1,999.99 in total for the year, counting only payments by cash, check or bank transfer. At $2,000 a 1099-NEC is due. For payments made in 2027 the figure is $2,099.99, because the threshold rises to $2,100.

Is there a new 1099 threshold for 2026?

Yes. Payments made on or after January 1, 2026 are measured against $2,000, under P.L. 119-21 §70433. Forms filed in early 2026, which covered 2025 payments, still used $600.

When does the 1099 threshold change again?

Every year from 2027, by inflation. The 2027 figure is $2,100 (Rev. Proc. 2026-35). The IRS publishes each year’s amount in its annual inflation revenue procedure, usually in the autumn before the year starts, and at IRS.gov/InflationAdjustment.

What is the $600 reporting rule?

It was the 1099-NEC and 1099-MISC threshold for payments made through December 31, 2025. People also use the phrase for the 1099-K rule that was scheduled for payment apps and never took effect: the same act set that test back to over $20,000 and over 200 transactions. Neither $600 rule applies to 2026 payments, except the attorney gross proceeds and cash fish purchase boxes, which stay at $600.

Do you have to file a 1099 if you made less than $20,000?

That question mixes two forms. The $20,000 test is for a 1099-K from a payment app or marketplace. A business paying you $2,000 or more by check or transfer still sends a 1099-NEC, whatever your total for the year. And with or without a form, the income goes on your return.

What is the W-9 threshold for 2026?

There is none. A W-9 is a request for the payee’s name and taxpayer ID, and you can ask for one before any payment. Collecting it up front is what lets you file on time if the payee crosses $2,000 later.

Who is exempt from 1099 reporting?

Corporations, for most payments, plus anyone you paid only by card or payment app, suppliers of goods, and employees, who get a W-2. The exceptions and the LLC cases are laid out in when to send a 1099.

What happens if I don’t send a 1099 that was due?

A penalty per form, charged once for the IRS copy and again for the contractor’s copy. For forms due in 2027 it runs from $60 to $340 a form depending on how late it is. The tiers and relief are in the 1099 late filing penalty.

Questions about how a contractor is taxed, or whether to work as a W-2 employee or a 1099 contractor, are about the payee’s own return. They are out of scope here; a tax preparer is the right source.

When the books cannot produce contractor totals

Every rule on this page assumes you can pull, per contractor, the payments made by check and bank transfer in one calendar year. If months of the year are still unentered, or contractor payments went in as bank-feed transfers with no vendor attached, there is no total to compare against $2,000 and the forms wait on the books. Catch-up bookkeeping enters the missing months from the bank statements with each payment against its vendor, so the 1099 report is right before January.

$99per month of backlog20% off 6+ months

When to hand this off: if your 2026 books are more than a month or two behind, or you cannot say which contractors you paid by check or transfer without reading statements line by line, the 1099 list is waiting on the books. A free file review shows how far behind they are before any price is given, and catch-up bookkeeping has the full scope.