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If you hire contractors, pay rent to a landlord, or work with outside service providers, you'll be filing fewer 1099s next January. The threshold for Form 1099-NEC and Form 1099-MISC is $2,000 for payments made in 2026, up from $600, a number that had been in place for more than seventy years. The House Ways and Means Committee estimated the increase wipes out more than a third of all 1099-MISC filings.
How it works now
The threshold is per payee, per calendar year, based on the total. Pay a contractor $1,800 across four projects in 2026 and you don't need to issue a 1099-NEC. Pay them $2,500 and you do.
The $2,000 threshold also covers most of what gets reported on Form 1099-MISC: rents, prizes and awards, other income, and medical and health care payments.
No 1099 doesn't mean no tax
The $2,000 figure sets when you have to issue a tax document, and it has nothing to do with what the person you paid owes tax on. A contractor you paid $1,800 in 2026 won't get a 1099-NEC from you, and they still owe tax on that $1,800.
The people on the receiving end are the ones who need to hear this. Fewer forms are going to arrive in the mail this coming February, and some contractors will read that as a lighter year than they had. If you earn contract income, track it out of your own records instead of waiting to see what shows up.
Fewer forms, same recordkeeping
You won't know in March which vendors are going to cross $2,000 by October. A vendor sitting at $1,400 in the spring is at $4,000 by the fall often enough that the only way to answer the question in January is to have tracked the payments all along. You're filing fewer forms, but you need the same information to work out which ones to file.
So keep doing what you were doing. Get the W-9 when you start working with a vendor, while you still have an unpaid invoice in hand. Run year-to-date totals by payee sometime in the fall so you can see who's getting close and chase down a missing W-9 before you're against the deadline.
What didn't move
Not everything went to $2,000. Royalties are still reportable at $10. Gross proceeds paid to an attorney are still at $600. And if you've withheld federal income tax under the backup withholding rules, you file regardless of the amount. Backup withholding doesn't line up with the $2,000 threshold until 2027.
How you pay still decides who reports. Pay by credit card, or through a platform like PayPal or Stripe as a goods-and-services transaction, and the processor handles it on a 1099-K instead of you. Pay through Zelle, or with the friends-and-family option on a payment app, and it never goes through that network, so it lands back on you. Adding up everything you paid a vendor and putting the whole number on a 1099-NEC will double-report their income, and they're the one who has to sort it out with the IRS.
The number is going to keep moving
$2,000 is the figure for 2026. Starting in 2027 it gets adjusted for inflation each year, rounded to the nearest $100. This isn't a number to learn once.
States run separately. Mississippi and Wisconsin are still at $600, Missouri at $1,200, and several states set thresholds with no connection to the federal change. You can be fine federally and late with a state.
Check the applicable threshold each year rather than carrying last year's forward.
There are about four months left in 2026. Take a look now at which vendors are getting close to $2,000 and which W-9s you're missing. It's a much smaller job in August than it is on January 15.
If you're looking at your vendor list and not sure who needs a form, or you're on the other end of this and got paid without one, grab a spot on my calendar and we can walk through your situation.
This article is intended for general informational purposes and does not constitute tax or legal advice. Reporting requirements depend on the type of payment, the recipient, and the payment method, and outcomes vary with individual facts and circumstances.
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