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1099s in January 2027: the new $2,000 threshold and your deadlines
Starting with payments made in 2026, most contractors need a 1099-NEC only if you paid them $2,000 or more. Here's what changed and what's due February 1, 2027.
If you pay independent contractors, January is 1099 season. This year brings a real change: the One Big Beautiful Bill Act raised the reporting threshold for most 1099 payments from $600 to $2,000.
What changed
- Higher threshold. For payments made after December 31, 2025, you generally file Form 1099-NEC for a contractor only if you paid them $2,000 or more during the year. The old threshold was $600.
- Many 1099-MISC payments too. Several 1099-MISC categories, such as rent and "other income", move to $2,000 as well.
- Some rules stay the same. Royalties are still reportable at $10 or more, and gross proceeds of $600 or more paid to an attorney still go on Form 1099-MISC.
- Backup withholding. If you withheld backup withholding from a payment, a 1099 is generally still required whatever the amount.
Deadlines for 2026 payments
| Form | Copy to the contractor | File with the IRS |
|---|---|---|
| 1099-NEC | February 1, 2027 | February 1, 2027 |
| 1099-MISC | February 1, 2027 | March 1, 2027 (paper) or March 31, 2027 (electronic) |
The usual January 31 deadline falls on a Sunday in 2027, so it moves to Monday, February 1. There is no automatic extension for Form 1099-NEC.
Most businesses must e-file
If you file 10 or more information returns in total for the year, for example W-2s and 1099s together, the IRS requires you to file them electronically.
Your January checklist
- Make sure you have a Form W-9 from every contractor, with their correct name and taxpayer ID number.
- Add up what you paid each contractor in 2026. Leave out payments made by credit card or through apps like PayPal, because the payment company reports those on Form 1099-K.
- Compare each total with the new $2,000 threshold.
- Send copies to your contractors and file with the IRS by February 1, 2027.
Below $2,000 still counts
A payment under $2,000 may not need a 1099, but it's still a business expense that belongs in your books, and your contractor still has to report the income. Clean records make tax time faster and keep you ready if the IRS asks questions.
Need help with your 1099s? We prepare and file 1099s and keep the books behind them for small businesses in Orange, Los Angeles and Riverside County. Book a free consultation.
This article is general information, not tax advice for your situation. Tax rules change, so talk with us before acting on it.
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