1099 Threshold 2026: The $2,000 Rule, Form by Form

For payments made in 2026, the federal 1099 threshold is $2,000 per payee for the calendar year, up from $600, for Form 1099-NEC and most Form 1099-MISC boxes. A payee you pay $2,000 or more gets a form; one you pay $1,999 does not. The change comes from section 70433 of the One Big Beautiful Bill Act (Public Law 119-21), which amended IRC section 6041 for payments made after December 31, 2025.

The date that matters is the date you pay, not the invoice date and not the year you file. The 1099s filed in early 2026 reported 2025 payments and still used $600. The forms you file in early 2027 report 2026 payments, so they are the first filed at $2,000.

Not every box moved. Royalties are still reported from $10, gross proceeds paid to an attorney from $600, and direct sales of consumer products for resale from $5,000. Starting with payments made in 2027, the $2,000 base is adjusted for inflation each year; the IRS had not published the 2027 figure as of October 15, 2026.

The statute is in force for 2026 payments. Treasury's regulations implementing it are still proposed, but the $2,000 threshold applies either way.

Every 1099 threshold by payment year

Each column is the year the payment was made. The filing season follows a year later.

The box figures are from the IRS Instructions for Forms 1099-MISC and 1099-NEC (Rev. 12-2026), already published for the 2026 forms. If an IRS page shows $600, check its edition: the web version of the General Instructions for Certain Information Returns is still the 2025 edition, which Publication 1099 (2026) replaces, and the "About Form 1099-MISC" page had not been updated as of October 15, 2026.

Attorney gross proceeds and cash fish purchases stayed at $600. They are reported under different Code sections (6045(f) and 6050R), whose $600 figures the new law did not touch. A settlement check paid to a plaintiff's attorney is reported from $600 in 2026, while a fee you pay your own counsel is reported only from $2,000.

The 1099-K test is a different law. Section 70432 of the same act restored the threshold for payment apps and online marketplaces to more than $20,000 and more than 200 transactions, as though the 2021 reduction to $600 had never been enacted. Both conditions must be met, and the figures are not indexed. Card processors report payment card transactions at any amount.

W-2G figures for bingo, keno and slot machines rise to $2,000 under the statute; the proposed regulations restate them and keep the existing rules on the amount wagered.

The 1042-S row is a warning. The $2,000 floor is a domestic information-reporting rule. A withholding agent files Form 1042-S for each reportable US-source payment to a foreign person, even when treaty relief means nothing is withheld, so a $900 fee to a nonresident consultant for work performed in the United States is still reported. The rules for foreign payees are covered in our guide to withholding and Form 1042-S for foreign vendors.

The "2027 and later" column reads "indexed" because the IRS has not yet set the 2027 amount; how it is calculated is explained further down.

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Who crosses $2,000: the rules that build the payee list

The question in January is never "what is the threshold". It is which of the payees in last year's ledger get a form. A 1099-NEC goes to every payee who is not your employee, is not exempt as a corporation, and was paid $2,000 or more during the calendar year for services in the course of your business, including parts and materials billed with the service. Most of the work is in the totals behind "paid $2,000 or more", and a handful of rules decide them.

Total by taxpayer identification number, not by vendor record. The threshold applies per payee, and the TIN is the practical key for finding one. Vendor masters rarely line up with that. A sole proprietor set up once under a trade name and again under a personal name, a subcontractor paid by three project sites, an electrician re-created after a bank-detail change: each looks like two or three vendors under $2,000 and is one payee over it. Watch the sole proprietor who gave an EIN on one W-9 and a Social Security number on another: two TINs, one payee. General contractors meet this constantly, which is why a 1099-NEC workpaper for construction subcontractors groups payments by TIN before testing anything.

The payment date assigns the year. An invoice dated December 2025 and paid on January 8, 2026 is a 2026 payment, tested at $2,000. The reverse also holds: a January 2026 invoice prepaid in December 2025 belonged to 2025, when $600 applied. Two cases show what the new figure does to a payee list:

• A bookkeeper paid $1,450 across 2026 would have received a 1099-NEC under the old rule. For 2026, no form is required.
• A consultant invoices $900 in December 2025 and $1,300 in March 2026. If the December invoice was paid in January 2026, 2026 payments total $2,200 and a 1099-NEC is due in early 2027. If it was paid before year end, 2026 payments total $1,300 and none is.

Card and payment-app payments come out of your totals. Anything paid by credit card, debit card or through a third party network such as a payment app is reported by the payment settlement entity on Form 1099-K, and the IRS instructions say it is "not subject to reporting on Form 1099-MISC or Form 1099-NEC." A contractor paid $1,500 by check and $3,000 by corporate card is a $1,500 payee for your 1099-NEC, and no form is due from you. On the contractor's side, the card payment shows up on the processor's 1099-K instead, and reconciling a Form 1099-K against your books is the contractor's job.

Corporations are still exempt, with the same exceptions. Payments to a corporation, including an LLC taxed as a C or S corporation, are generally not reported. The exceptions did not change: attorney fees and gross proceeds paid to attorneys, medical and health care payments, cash payments for fish purchased for resale, and substitute payments in lieu of dividends. For law firms the split matters more than ever, because fees for legal services go on 1099-NEC box 1a from $2,000 while gross proceeds paid to an attorney stay on 1099-MISC box 10 from $600. The detail, including incorporated firms, is in our article on how attorney fees and gross proceeds split between 1099-NEC and 1099-MISC.

Backup withholding now waits for $2,000. When a payee has not provided a TIN, or the IRS has told you the TIN is incorrect, payments become subject to backup withholding at 24% once the year's payments reach the threshold, which for 2026 is $2,000 rather than $600. The withholding is computed on the payment that takes the total to $2,000 and on every later payment that year. The proposed regulations keep one exception to that wait: if you were required to file a return for the same payee in the prior year, or backup withheld on them, the aggregation rule does not apply and withholding starts with the first payment. And any payment you did backup withhold on is reported, whatever the year's total.

Filing below the threshold is allowed. The threshold decides when a form is required; it does not bar one below it. Some firms will keep a lower internal line for 2026, either for consistency across years or because some of their payees are in states that still require reporting from $600 or $1,000.

If you are on the other side of this, as a contractor: a client who paid you less than $2,000 in 2026 does not have to send you a 1099-NEC, but the income is taxable and reported on your return all the same.

So when do you need to issue a 1099 for 2026? When a non-exempt payee's total of reportable payments (services, rents and the like, not purchases of goods), grouped by TIN and counting only payments made in calendar 2026 by check, ACH, wire or cash, reaches $2,000, or reaches the lower figure for the boxes that kept one. Getting those totals right all year rather than in January is a workflow question, covered in our guide to tracking vendor payments through the year for 1099 reporting.

What Treasury's own numbers say about the change

The $600 figure had stood for more than seventy years. In Treasury's words, "this reporting level had been in place since 1954 and had not been indexed to inflation."

The proposed regulations implementing the new law also measure who the change takes out of reporting. According to Treasury's proposed regulations on the higher reporting threshold, for tax year 2024 approximately 3.3 million payors filed 18.8 million Forms 1099-NEC reporting nonemployee compensation of at least $600 and less than $2,000, and more than 328,000 payors filed 7.9 million Forms 1099-MISC in the same band.

Treasury then projects the effect on the first filing season under the new rule, calendar year 2027, which carries the returns for 2026 payments:

The total that circulates, 48.86 million fewer forms and a filing burden $982 million lower in 2024 dollars, is not a 1099 figure. It also counts 19.06 million W-2Gs for gambling winnings between the old and new thresholds (in the 2024 data, almost 80 percent of those were slot machine wins), 944,000 W-2s for small wage payments with no withholding, and a few hundred Forms 945. The 1099 share of the burden reduction is about $508 million.

On payors: 3.5 million filed at least one return between the old and new thresholds for tax year 2024, counting each payor once. Treasury projects 3.6 million potentially affected for tax year 2026, about 98 percent of them small entities with gross receipts under $40 million, which "will on average need to issue 10 fewer information returns."

Ten forms is a small number per business, and for an AP team the saving is less in the forms than in what comes before them. The returns that drop out are the long tail: the photographer booked once, the speaker paid a single honorarium, the small landlord of a storage unit. That tail is where most W-9 chasing and TIN corrections happen. What remains is a shorter list of larger, recurring payees, which are the relationships where vendor records are usually already in order.

Where the rule stands, and how the 2027 figure is set

As of October 15, 2026, the position is this.

• The statute is law. Section 70433 of Public Law 119-21 applies to payments made after December 31, 2025. Treasury's own preamble says the new dollar thresholds "apply regardless of these proposed regulations."
• The regulations are proposed, not final. REG-113229-25 was published on April 17, 2026 and reprinted in Internal Revenue Bulletin 2026-19. Comments closed on June 16, 2026, and a public hearing was scheduled for July 17. No final regulations have been published. The federal regulatory agenda lists final action for November 2026, and until then the regulation text in the Code of Federal Regulations still says $600. That text is out of date, not in conflict: the statute governs.
• The IRS forms and instructions already use $2,000. The December 2026 revisions of Forms 1099-NEC and 1099-MISC and their instructions, and Publication 1099 (2026), are written for the new figures.

How the 2027 figure is calculated. Section 6041(h), added by the same act, increases the $2,000 for each calendar year after 2026 by a cost-of-living adjustment based on the chained consumer price index, with calendar year 2025 as the base. It then says that if the increase "is not a multiple of $100, such increase shall be rounded to the nearest multiple of $100." Because rounding goes to the nearest $100, the threshold moves only once the increase reaches $50, which is 2.5% of $2,000:

• Cumulative inflation under 2.5% leaves the 2027 threshold at $2,000.
• Inflation from 2.5% up to 7.5% makes it $2,100.

The index compares the 12 months ending August 31, 2026 with the 12 months ending August 31, 2025. The IRS publishes the result in its annual inflation-adjustment revenue procedure, which usually appears in October or November; the 2027 procedure had not been published by October 15, 2026. Whatever the figure is, it applies to payments made in 2027 and to the forms filed for them in early 2028.

One sentence in last year's procedure reads differently. Rev. Proc. 2025-32 says the $2,000 base "is adjusted for inflation for returns required to be filed in calendar year 2027." Read literally, that would index the forms you file in January 2027. The statute and the proposed regulations both say otherwise: payments made in 2026 are tested at a flat $2,000, and indexing starts with payments made after December 31, 2026.

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State 1099 thresholds that did not move to $2,000

The new law changed a federal threshold. Each state that collects 1099s sets its own rule, and a state rule follows the federal change only if it was written to. Three patterns decide it.

• A dollar figure in state law or rules. It stays where it is until the legislature or the revenue department changes it.
• A cross-reference to the federal requirement. If the state duty is "file a copy of any 1099 you must file with the IRS", the federal change carries through automatically.
• IRC conformity, which settles less than it seems. Whether a state adopts the Internal Revenue Code on a rolling basis or as of a fixed date governs its income-tax base. Whether that moves its information-return threshold depends on how the reporting rule itself is written, so a state's conformity date alone does not answer the 1099 question.

Search results contradict each other on which states did what, so the table below gives only what each state revenue department says on its own pages, all read on October 15, 2026, with the date each page carries.

Several of these predate the 2026 season, and Oregon's answer is a stated plan rather than a rule in force. New Jersey's $1,000 now sits below the federal floor: read as written, its instructions still call for a state 1099 on a $1,500 payment that no longer needs one federally.

That gap is the one that catches payers who rely on the Combined Federal/State Filing Program. Under it the IRS forwards electronically filed 1099s to participating states, acting, in its own words, as a forwarding agent only. It can forward only what was filed federally. A payment between a state's lower floor and the federal $2,000 has no federal return to forward, so it has to be filed with the state directly. Participation is no guarantee either: Maryland will not process forwarded 1099s, and DC asks for its own filing even from approved CF/SF filers.

For a state not in the table, open the revenue department's withholding or information-return instructions for tax year 2026 and look for one of two things: a dollar figure, or a sentence tying the duty to the federal filing requirement. Several states had not published 2026 guidance by mid-October, so check again in January. For payees in a state that kept a lower figure, keep tracking per payee at that figure all year, because the federal $2,000 no longer flags them.

What the $2,000 threshold did not change

The threshold changed which payees get a form. Almost everything else about the 2026 1099 requirements is where it was.

W-9s are still collected at onboarding. In March nobody knows which new contractor will reach $2,000 by December, and a payee who reaches it with no TIN on file puts that payment and every later one that year under backup withholding. A higher threshold makes it tempting to skip the W-9 for small vendors. It does not change the cost of finding out in January that a payee who crossed $2,000 never sent one. The W-9 errors to catch at vendor intake are the same as before.

TIN matching and B-notices work as before. There will be fewer forms, but each one still has to carry a name and TIN combination the IRS can match, and a mismatch still produces a CP2100 or CP2100A notice. The steps for responding to a CP2100 B-notice have not changed.

The deadlines are the same, and the 2027 calendar pushes most of them to the next business day. If a due date falls on a weekend or a legal holiday, it moves to the next business day:

The dates in the last column apply the IRS's next-business-day rule to the 2027 calendar; confirm them on the IRS tax calendar before you schedule the run.

Electronic filing is required at 10 returns. The count is the total of all information returns you file for the year, across form types, so six 1099-NECs and four 1099-MISCs mean e-filing. A business whose 1099 count drops below 10 under the new threshold can file on paper again, provided its other information returns, W-2s included, do not take the total back to 10.

Penalties still apply form by form. The threshold reduces the number of forms that can be late or wrong; it does not change the penalty for one that is.

One thing does change this season, though not because of the threshold: the IRS is retiring its FIRE system at the end of 2026, so electronic returns for 2026 payments go through IRIS.

New boxes on the 2026 Forms 1099-NEC and 1099-MISC

The forms you file at the new threshold also have a new layout. The changes come from the same act's provisions on tips and overtime (sections 70201 and 70202), not from the threshold, but they appear on the same forms in the same season.

Form 1099-NEC (Rev. 12-2026):

• Box 1 becomes box 1a, nonemployee compensation. This is the box the $2,000 test applies to.
• Box 1b, cash tips, and box 1d, qualified overtime compensation, report amounts already included in box 1a. For overtime only the premium is entered: the "half" of time-and-a-half.
• Box 1c carries the Treasury Tipped Occupation Code, up to two codes per payee.
• Direct sales stays in box 2, excess golden parachute payments in box 3 and federal income tax withheld in box 4.

Form 1099-MISC (Rev. 12-2026):

• New box 13a, cash tips, box 13b, Treasury Tipped Occupation Code, and box 14, overtime compensation. The amounts in 13a and 14 are included in box 3.
• Nonqualified deferred compensation moves to box 15, and the state boxes to 16 through 18.

Because the tip and overtime boxes are subsets of box 1a or box 3, the threshold is tested on those totals, never on the subset boxes alone. Both December 2026 revisions are continuous-use forms: they are used for 2026 payments and for later years until the IRS issues a superseding revision.