TLDR;
The 1099-NEC reporting threshold rose from $600 to $2,000 for payments made on or after January 1, 2026.
Forms for 2026 payments are generally due to both the IRS and your contractors by Monday, February 1, 2027.
There is no automatic extension for Form 1099-NEC.
Fewer forms may be required, but you should still track every contractor payment. Income under $2,000 is still taxable to the person who received it.
Download our free 2026 Contractor and 1099 Tracker below to get organized before year end.
What Changed for 1099-NEC in 2026, the New $2,000 Threshold
If you are self-employed or own a small business and paid independent contractors this year, the paperwork rules look different than they did last year. Under the One Big Beautiful Bill Act, the reporting threshold for Form 1099-NEC, and for most Form 1099-MISC payment categories, rose from $600 to $2,000. The new threshold generally applies to payments made on or after January 1, 2026, which means it first shows up on forms filed in early 2027.
This is the first change to that threshold since 1954. Starting in 2027, the $2,000 figure is scheduled to be adjusted for inflation, so the number may move each year going forward.
Why You Should Still Track Contractor Payments Under $2,000
A higher threshold may mean fewer forms to file, but it does not mean you can stop keeping records. You often won't know in March whether a contractor who has billed $1,200 so far will bill another $900 by December.
Clean payment records help you decide who needs a form, support your business deductions, and may help if the IRS ever asks questions about a return.
When Is Form 1099-NEC Due for 2026 Payments
Form 1099-NEC for 2026 payments is generally due to both the IRS and each contractor by Monday, February 1, 2027. The usual January 31 deadline falls on a Sunday in 2027, so it moves to the next business day.
Can You Get an Extension for Form 1099-NEC
Unlike many other filing deadlines, Form 1099-NEC does not come with an automatic extension. You may request an extension by filing Form 8809 by the original due date, but approval is not automatic and generally requires a qualifying reason.
Penalties for Filing Form 1099-NEC Late
Information return penalties can apply for filing late, filing with incorrect information, or failing to furnish a copy to your contractor. Penalty amounts are generally tiered by how late the form is and are adjusted for inflation each year.
Who Needs a 1099-NEC in 2026, and Who Doesn't
In general, you issue a 1099-NEC to a non-employee you paid $2,000 or more during 2026 for services performed in the course of your trade or business. The W-9 you collect from each contractor is usually what tells you which category they fall into.
Who Generally Gets a 1099-NEC
Individuals and sole proprietors you paid for services
Single-member LLCs and partnerships that are not taxed as corporations
Attorney fees of $2,000 or more, even if the law practice is incorporated
Who Generally Doesn't Get a 1099-NEC, Including Corporations
Payments to C corporations or S corporations, other than attorney fees
Employee wages, which belong on Form W-2
Payments made by credit card, debit card, or through a payment app's business option, which are generally reported by the payment processor on Form 1099-K instead
1099-K vs. 1099-NEC for Card and Payment App Payments
The Form 1099-K threshold for payment apps and card processors reverted to more than $20,000 and more than 200 transactions. If you paid a contractor through a card or a payment app's business option, that payment is generally the processor's reporting responsibility, not yours.
When a 1099-NEC Is Required Under $2,000, Backup Withholding
If you applied backup withholding to a contractor's payments, for example because they never provided a valid Taxpayer Identification Number, a 1099-NEC is generally required regardless of the amount paid.
Paid Less Than $2,000 as a Contractor, Is It Still Taxable
If you are on the receiving end and earned less than $2,000 from a client, you may not get a 1099-NEC. That income is still taxable. The threshold changes the paperwork for the payer, not your obligation to report what you earned.
Year-End 1099-NEC Checklist for Small Business Owners
A few steps now may save you a scramble in January.
Collect a W-9 from every contractor before you make the final payment of the year. It is usually much easier to get one while you still owe someone money.
Log every payment with the date, amount, and payment method.
Total your payments by contractor and flag anyone at or near $2,000.
Separate out card and payment app payments that will likely be reported on Form 1099-K.
Have everything gathered by mid-January so there is time to fix missing names, addresses, or TINs before February 1, 2027.
Free 2026 1099 Contractor Tracker, Google Sheets Template
To make this easier, we built a free Google Sheets tracker you can copy and use for your own business.
What's Inside the 1099 Contractor Tracker
Start Here tab: the 2026 rules, step-by-step instructions, and the $2,000 threshold in one place
Contractors tab: W-9 status, entity type, the last four digits of each TIN (so full Social Security numbers stay out of a shared sheet), automatic payment totals, and a flag that turns red with "YES, file by 2/1/27" once a contractor reaches $2,000
Payment Log tab: date, a contractor dropdown, amount, and payment method, with card and app payments reported on Form 1099-K automatically excluded from your 1099-NEC totals
Behind on 1099 Filing or Facing IRS Information Return Penalties
If you have unfiled 1099s from prior years, or you have received an IRS notice about information return penalties, you are not alone, and waiting usually doesn't make it easier. Depending on your situation, it may be possible to file the missing forms and request penalty relief where you qualify, such as reasonable cause.
Semper Tax Relief is led by an Enrolled Agent who can represent taxpayers before the IRS. We can review your situation, help you understand your options, and work with you toward getting current.
Get Organized Before the February 1, 2027 1099 Deadline
Existing clients can upload contractor records, W-9s, and questions directly through the client portal. If you are not yet a client and want help with 1099 filing or prior-year penalties, reach out to our team to schedule a consultation.
1099-NEC 2026 Frequently Asked Questions
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Not for 2026 payments. For payments made on or after January 1, 2026, the Form 1099-NEC and most Form 1099-MISC reporting thresholds generally rose to $2,000. The $600 threshold still applies to payments made in 2025 and earlier.
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Generally no, for payments made in 2026. One common exception: if you applied backup withholding, a 1099-NEC is generally required regardless of the amount. Some states may have their own lower thresholds, so check your state's rules.
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For payments made on or after January 1, 2026, you generally need to issue Form 1099-NEC to a non-employee you paid $2,000 or more for services during the year. The threshold was $600 for 2025 and earlier.
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Form 1099-NEC for 2026 payments is generally due to both the IRS and the contractor by Monday, February 1, 2027, because January 31, 2027 falls on a Sunday.
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There is no automatic extension. You may request one by filing Form 8809 by the original due date, but approval is not automatic.
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It depends on how the LLC is taxed. Single-member LLCs and LLCs taxed as partnerships generally receive a 1099-NEC, while LLCs taxed as C or S corporations generally do not, except for attorney fees. The contractor's W-9 should show the tax classification.
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Generally no. Payments made by credit card, debit card, or a payment app's business option are usually reported by the payment processor on Form 1099-K instead.
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Yes. Income under $2,000 is still taxable even if you do not receive a 1099-NEC. The threshold affects the payer's filing requirement, not your obligation to report income.
