1099 threshold 2026: $600 vs $2,000 — which is it?

What changed

For decades, the rule was simple: pay a contractor $600 or more in a year, file a 1099. The One Big Beautiful Bill Act changed that for 2026, raising the reporting threshold to $2,000 for both 1099-NEC (nonemployee compensation) and 1099-MISC (other payments like rent and royalties — with exceptions below).

The result is the confusion you're seeing everywhere: half the internet updated, half didn't, and business owners are getting both answers depending on which result they click.

The 2026 thresholds at a glance

The 1099-K threshold reverted to $20,000 and 200 transactions, retroactive — a separate change that added to the confusion. Note the 1099-K is filed by the payment processor, not by you.

Who still gets a 1099 in 2026

A vendor generally needs a 1099-NEC for 2026 if all three are true:

• ✓You paid them $2,000 or more during 2026.
• ✓They're not a corporation — corporations are generally exempt from 1099-NEC reporting.
• ✓You paid by check, ACH, bank transfer, wire, or cash — not by credit card or PayPal.

Who doesn't — the three filters that shrink your list

1. Under $2,000. The contractor you paid $1,200 drops off entirely. This alone removes a large share of vendors from most small businesses' lists.

2. Paid by card or PayPal. Payments made by credit card or through third-party settlement organizations are reported by the processor on Form 1099-K. Filing a 1099-NEC for the same payment double-reports the income — don't do it.

3. Corporations. Payments to C corps and S corps are generally exempt from 1099-NEC. (LLCs are the tricky middle — it depends on how they're taxed, which is why the W-9 matters.)

The exceptions hiding in the fine print

The $2,000 number isn't universal. A few categories kept their lower thresholds:

• Royalties — still $10.
• Attorney proceeds — still $600.

If you pay royalties or legal settlements, check those categories separately rather than applying the $2,000 rule blindly.

What to do now (it's October — perfect timing)

January is when this always goes sideways: bookkeepers discovering mid-month that a contractor paid $4,000 last March never returned a W-9. With three months of runway, the play is simple:

1. Run your vendor list through the 2026 rules. Our free 1099 readiness check takes your vendor payments CSV and flags who actually needs a form under the $2,000 threshold — including the corporate and card-payment exclusions.
2. Collect missing W-9s now, while contractors answer email. Send each missing vendor a link with our free W-9 request tool — they fill it in their browser, no account needed, and it comes straight back to you.
3. Calendar the deadline. 1099-NEC forms for 2026 are due to recipients and the IRS by February 1, 2027 (January 31 is a Sunday). Everything above is what makes that deadline painless.

Frequently asked questions

Do I still file a 1099 for someone I paid $800 in 2026?

Generally no — $800 is under the 2026 $2,000 threshold for 1099-NEC/MISC. The $600 rule applied to 2025 and earlier.

What if I paid a contractor $2,500 but by credit card?

No 1099-NEC from you. The card processor reports it on Form 1099-K. Filing a NEC as well would double-report the income.

Does the $2,000 threshold apply to 1099-K?

No — 1099-K is a different form with different rules ($20,000 and 200 transactions), and it's filed by payment processors, not by payers.

I'm missing W-9s for vendors over the threshold. What now?

Request them immediately — you're subject to 24% backup withholding if a vendor won't provide a TIN. Our free W-9 request tool sends them a fill-in-the-browser link.