Free tool
1099 threshold checker (2026 rules)
The 1099 rules changed for 2026: the 1099-NEC threshold is now $2,000, and payment apps only report past $20,000 and 200 transactions. Answer three questions and see whether a vendor payment needs a form from you.
Check a vendor payment
Covers Form 1099-NEC for business payments to US contractors in calendar 2026. General information, not tax advice.
Result
Yes: file a 1099-NEC
You paid this vendor $2,500 in 2026 by direct means, at or over the $2,000 threshold. Collect a W-9 if you have not, and file by the January deadline. Vendor totals are exactly what a 1099 report in your books should be tracking all year.
The 2026 changes, in short
The One Big Beautiful Bill Act, signed July 2025, made the first big change to contractor reporting in decades: from 2026, you file a 1099-NEC when direct payments to a vendor reach $2,000 in a year, up from the $600 line that had stood since the 1950s. Payment apps and marketplaces went the other way from the briefly planned $600 rule, back to $20,000 and 200 transactions.
The practical effect: fewer forms in the system, so your own vendor totals become the record that counts. A ledger that tags vendors as you pay them makes January a report, not a reconstruction; that is what the 1099 report does, and the 1099 preparation guide walks the whole season.
Track it all year instead
Common questions
What is the 1099 threshold for 2026?
For payments made on or after January 1, 2026, the 1099-NEC and 1099-MISC threshold is $2,000 per vendor per year, raised from $600 by 2025’s One Big Beautiful Bill Act and indexed to inflation starting 2027. Payments made during 2025 still used the $600 threshold.
Did the 1099-K threshold change too?
Yes. The same law took the 1099-K rule for payment apps and marketplaces back to the old standard: a processor files one only when a payee tops $20,000 AND 200 transactions in the year. The briefly planned $600 payment-app threshold is gone.
Do I send a 1099 to a contractor I paid by credit card or PayPal?
No. Card and third-party app payments are excluded from 1099-NEC because the processor is the reporting party for those, on Form 1099-K. Your 1099-NEC obligation covers direct payments: cash, check, ACH, wire.
Does no 1099 mean the income is not taxable?
No. The threshold changes who must file a form, not what is taxable. A contractor paid $1,500 with no form still owes tax on it, and your business still deducts it. That is why books that track vendor totals all year matter more, not less, as fewer forms get filed.
Do corporations get 1099s?
Generally no: payments to C and S corporations are exempt from 1099-NEC. The famous exception is attorney fees, reportable even to incorporated firms. The W-9 you collect from each vendor is where they certify their status, so collect them as you onboard vendors, not in January.
Never rebuild vendor totals in January again
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