Do I Need to File a 1099-NEC?
Check whether a payment to a contractor needs a Form 1099-NEC, using the right threshold for the year: $600 through 2025 and $2,000 for payments made starting in 2026.
How 1099-NEC reporting works
Businesses report payments to non-employees for services on Form 1099-NEC. You send one copy to the worker and file one with the IRS, both by January 31 of the following year.
The threshold changed for 2026
For payments made through 2025, you file when you pay someone $600 or more in a year. The One Big Beautiful Bill Act raised the threshold to $2,000 for payments made starting in 2026, with inflation adjustments beginning in 2027. The backup-withholding threshold rose to match. Payments below the threshold are still taxable income to the worker; you just don't have to report them.
Who usually doesn't get a 1099-NEC
- Corporations, with an important exception: payments to attorneys and law firms for legal services are reported even if the firm is a corporation.
- Payments for goods alone, as opposed to services.
- Payments by credit card or payment apps: the card processor or payment platform reports those on Form 1099-K, so you don't also file a 1099-NEC.
Collect a W-9 before you pay
Ask every contractor for a Form W-9 before the first payment. It gives you the legal name, tax classification and taxpayer ID you'll need, and tells you whether the payee is a corporation. If a payee won't provide a taxpayer ID, you may have to withhold 24% of what you pay them. The 1099 and W-9 penalty calculator shows what late filing or a missing W-9 can cost.
Filing 1099s also matters if a worker is ever reclassified: businesses that filed them get the lower rates under IRC §3509. See the misclassification cost calculator.
Want your I-9s and contractor files checked?
A records review for small employers is in the works: what's missing, what's expiring, and what to fix first. Email to be told when it opens. Don't attach any documents.
Rules last checked: October 1, 2026. Rates, deadlines and penalty amounts change; each page names its sources.
Spot an error or a rule change?
Email admin@employercheckup.com. Rates, deadlines and penalty amounts change, and corrections are made promptly.
Talk to a professional
For a decision about a specific worker, talk to an employment attorney or CPA. These tools estimate exposure and explain the rules; they don't decide individual cases.
General information, not tax advice. Confirm current thresholds and exceptions in the IRS instructions for Forms 1099-MISC and 1099-NEC for the year you're filing.