Important Changes to Forms 1099-NEC & 1099-MISC Beginning 2026

Beginning 2026, the federal reporting threshold for Forms 1099-NEC (Nonemployee Compensation) and 1099-MISC (Miscellaneous) increases from $600 to $2,000.  This means businesses will be required to file these forms if they pay an independent subcontractor or vendor $2,000 or more in 2026.  

These forms must be filed by any business that pays a non-employee during the year for any of the following:

• Services performed (including parts and materials)

• Professional service fees paid to an attorney

• Rents

• Other income payments

• Medical and health care payments

NOTE:  Payments made via cash/check, Zelle, ACH/EFT, wire transfer, and online bill payment (bank to bank only) are included in NEC and MISC calculations.  Payments to vendors made via credit/debit cards are excluded from NEC and MISC calculations.  Payments made via third-party networks such as PayPal and Venmo are typically included in NEC and MISC calculations, but may be excluded only if payments are tagged as "goods and services" at the time the payment is made.

Each 1099-NEC or 1099-MISC recipient should complete IRS Form W-9.  The IRS places the responsibility on the payer to obtain this information. Payers may be subject to penalties for not obtaining this information. We strongly recommend obtaining a completed Form W-9 from all subcontractors before any work is performed. This form can be found on the IRS website:

https://www.irs.gov/pub/irs-pdf/fw9.pdf 

For more information about Forms 1099-NEC and 1099-MISC filing, refer to:

https://www.irs.gov/instructions/i1099mec#en_US_202612_publi...