New 1099 Rules for 2026: The $2,000 1099-NEC Threshold and the $20,000 1099-K Rule

The rules for which payments trigger a Form 1099 have changed in both directions. For payments made in 2026, businesses send Forms 1099-NEC and 1099-MISC only when they pay someone $2,000 or more, up from $600. And payment apps and marketplaces are back to the old Form 1099-K threshold of more than $20,000 and more than 200 transactions. Here is what that means for the forms you send in January 2027 and the forms you receive.

Forms you send: 1099-NEC and 1099-MISC

• New threshold. Starting with payments made in 2026, you report payments of $2,000 or more to an unincorporated contractor, attorney, or landlord. The threshold will be adjusted for inflation starting in 2027.
• Payments made in 2025 still used the $600 threshold. If you are catching up on late 2025 forms, use $600.
• Due date. Form 1099-NEC is due to both the IRS and the contractor by January 31. Because January 31, 2027 falls on a Sunday, the deadline is Monday, February 1, 2027. Most 1099-MISC forms are due to recipients by the same date and to the IRS by March 1, 2027 on paper or March 31, 2027 if filed electronically.
• E-filing. If you file 10 or more information returns of any type in total, you must file them electronically.

The threshold applies per payee for the year. If you paid a designer $1,500 in March and $900 in October, the total of $2,400 needs a Form 1099-NEC.

What has not changed

• Payments to corporations are still generally exempt, except for legal fees and medical payments.
• Card and app payments made through a card network or payment app are reported by the processor on Form 1099-K, so you do not send a 1099-NEC for them.
• You still need a W-9. Collect a Form W-9 before you pay any contractor. If a contractor will not give you a taxpayer ID, you may need to withhold 24% backup withholding.
• States may be stricter. Several states keep their own reporting thresholds or require separate state filing. Check each state where your contractors work.

Forms you receive: 1099-K

Payment apps, card processors, and online marketplaces now send a Form 1099-K only if you received more than $20,000 and had more than 200 transactions in the year. Some states, including Massachusetts, Maryland, Virginia, and Vermont, require 1099-K reporting at $600, so you may still get a form.

The threshold only changes reporting. All business income is taxable whether or not you receive a form. Sellers who no longer get a 1099-K still need clean books that tie sales to deposits.

A January checklist for business owners

• Run a vendor report for 2026 and flag every unincorporated payee at $2,000 or more.
• Exclude amounts you paid by credit card or through payment apps.
• Make sure you have a current W-9 on file for each payee.
• Confirm state filing requirements for contractors outside your home state.
• File by February 1, 2027 and send copies to your contractors.

Our bookkeeping team keeps vendor records 1099-ready all year, and our payroll and HR compliance team prepares and files 1099s as part of year-end close. If you are not sure whether someone is a contractor or an employee, read our guide to 1099 vs. W-2 worker classification.

Frequently asked questions

Do I need to send a 1099 to a contractor I paid $1,800 in 2026?

Not for federal purposes, because the total is under $2,000. Check whether your state has a lower threshold.

I paid a contractor through Zelle. Is that a card payment?

No. Zelle and direct bank transfers are not processed through a card network or a third-party settlement organization, so you should send a Form 1099-NEC if the total is $2,000 or more.

What is the penalty for filing 1099s late?

Penalties are charged per form and increase the longer you wait, from a small amount per form if filed within 30 days up to several hundred dollars per form for intentional disregard. Filing on time is far cheaper.

Does the $2,000 threshold apply to rent payments?

Yes. Rent paid to an unincorporated landlord in 2026 is reported on Form 1099-MISC if it totals $2,000 or more.