As the year comes to a close, it’s important for businesses to prepare for upcoming 1099 reporting requirements. Whether you work with independent contractors, freelancers, or other service providers, understanding the latest filing thresholds, deadlines, and reporting rules can help you stay compliant and avoid potential penalties.
Here’s what you need to know about filing 1099s for the 2026 tax year.
Important Filing Deadlines
Businesses should be aware of the following deadlines for 2026 tax year reporting:
- Form 1099-NEC: Due to the IRS by February 1, 2027.
- Form 1099-MISC: Due to the IRS by March 31, 2027, if filing electronically.
- Recipient Copies: Both forms must generally be provided to recipients by February 1, 2027, although certain 1099-MISC reporting categories have later recipient deadlines.
Understanding the New 1099 Reporting Thresholds
For the 2026 tax year, the reporting threshold for several types of payments has increased from $600 to $2,000.
Form 1099-NEC: Nonemployee Compensation
Form 1099-NEC is used to report payments made to individuals or businesses providing services outside of traditional employment. This includes independent contractors, freelancers, consultants, and other service providers.
For 2026, businesses generally must issue Form 1099-NEC when qualifying payments total $2,000 or more during the year.
Form 1099-MISC: Miscellaneous Income
Form 1099-MISC is used to report certain types of payments, including rent, prizes and awards, other income, and medical or healthcare payments.
The reporting threshold for many of these categories has also increased to $2,000. However, some exceptions remain:
- Royalties: $10 or more.
- Gross proceeds paid to an attorney: $600 or more.
Who Is Required to Issue a 1099?
Businesses that make qualifying payments during the course of their trade or business may be required to issue Forms 1099. This includes LLCs, corporations, partnerships, and self-employed individuals.
Generally, 1099 reporting does not apply to W-2 employee wages, personal payments, or purchases of merchandise. Payments to most C corporations and S corporations are also exempt, although exceptions apply to certain payments involving attorneys and medical providers.
Which Payment Methods Count Toward 1099 Reporting?
Not all payment methods are treated the same for 1099 reporting purposes.
Payments made through cash, business checks, direct ACH bank transfers, and wire transfers generally count toward a business’s 1099-NEC or 1099-MISC reporting requirements.
However, payments processed through credit cards, debit cards, and third-party payment processors such as PayPal, Venmo, Stripe, and Square are generally excluded from these forms because they may be reported separately on Form 1099-K.
For PayPal and Venmo, this distinction depends on how the payment is processed. Payments made through business or Goods & Services transactions are generally handled through third-party reporting, while payments made through Friends and Family may need to be included in the payer’s 1099 reporting if they represent qualifying business expenses.
Don’t Forget Form W-9
One of the easiest ways to prepare for 1099 filing is to collect a completed Form W-9 before making payments to independent contractors, freelancers, or vendors.
Form W-9 provides the taxpayer identification information needed to prepare accurate 1099 forms and helps businesses avoid delays when filing deadlines approach.
A revised Form W-9 has been proposed but has not yet been approved. If a new version is finalized, businesses should begin using it for new requests. However, existing valid W-9 forms generally do not need to be replaced solely because a revised version becomes available.
You can access the current form here: IRS Form W-9 (March 2024).
Start Preparing Now
Staying organized throughout the year can make 1099 filing much easier. Review your vendor payments, confirm that W-9 forms are on file, and identify any payments that may meet the updated reporting thresholds.
Taking these steps now can help your business avoid last-minute complications and stay prepared for the upcoming filing season.
If you have questions about your business’s 1099 reporting requirements, the team at Henry & Peters is here to help.