The $2,000 1099 threshold for 2026 payments
Public Law 119-21 raised the reporting threshold for most 1099-NEC and 1099-MISC payments from $600 to $2,000 for tax years beginning after 2025. Tax year 2026 forms, filed in early 2027, are the first ones affected.
What changed and what did not
| Payment | Form and box | Threshold for 2026 |
|---|---|---|
| Nonemployee compensation, including attorney fees | 1099-NEC box 1a | $2,000 |
| Rents | 1099-MISC box 1 | $2,000 |
| Prizes, awards, other income | 1099-MISC box 3 | $2,000 |
| Medical and health care payments | 1099-MISC box 6 | $2,000 |
| Crop insurance proceeds | 1099-MISC box 9 | $2,000 |
| Royalties | 1099-MISC box 2 | $10 (unchanged) |
| Substitute payments in lieu of dividends or interest | 1099-MISC box 8 | $10 (unchanged) |
| Gross proceeds paid to an attorney | 1099-MISC box 10 | $600 (unchanged) |
| Fishing boat proceeds | 1099-MISC box 5 | Any amount |
| Direct sales of consumer products for resale | 1099-NEC box 2 or 1099-MISC box 7 | $5,000 |
| Any payment with federal backup withholding | 1099-NEC or 1099-MISC box 4 | Any amount |
The instructions say the $2,000 amount may be adjusted for inflation starting in calendar year 2027.
What it means for your filing
- Fewer forms. Contractors you paid $600 to $1,999 in 2026 no longer need a 1099-NEC, unless you withheld federal tax.
- Filing anyway is allowed. Filing a form under the threshold is not an error. The IRIS CSV tool flags these rows as warnings so you can decide.
- Payments by card or app are still excluded. Payments by credit card or through payment apps are reported on Form 1099-K by the payment company, not on your 1099-NEC.
- Keep collecting W-9s. You still need the payee's TIN to know whether backup withholding applies.
Other changes on the 2026 forms
Form 1099-NEC now has box 1a for nonemployee compensation, plus new boxes for cash tips (1b), tipped occupation codes (1c) and qualified overtime (1d). Form 1099-MISC adds boxes 13a, 13b and 14 for the same purposes. See the 1099-NEC template and 1099-MISC template pages.
Frequently asked questions
I paid a contractor $1,500 in 2026. Do I file a 1099-NEC?
Not required under the $2,000 threshold, unless you withheld federal income tax. You may still file one.
Does the $2,000 threshold apply to 2025 payments?
No. It applies to tax years beginning after 2025. Forms for 2025 payments, filed in early 2026, used $600.
Did the 1099-K threshold change too?
The 1099-K has its own rules, separate from 1099-NEC and 1099-MISC. See the IRS Instructions for Form 1099-K.
Sources
Last reviewed November 1, 2026.