New 1099 Reporting Threshold for 2026: What Business Owners Need to Know
You may have heard that the rules for issuing 1099s are changing. Starting in 2026, the federal reporting threshold for many 1099-NEC and 1099-MISC forms is increasing from $600 to $2,000 per recipient.
I’m personally very excited about this, but there are still important details to understand.
What Is Changing?
For payments made in 2025, businesses generally needed to issue a 1099-NEC when they paid $600 or more to a nonemployee for services performed in the course of business.
For payments made in 2026, that threshold increases to $2,000. The change was enacted as part of the One Big Beautiful Bill Act and applies to certain information reporting requirements, including 1099-NEC and 1099-MISC reporting.
For example, if your business pays an independent contractor $1,500 during 2026 for services, you generally will not have a federal 1099-NEC filing requirement based solely on that payment amount. If you pay that contractor $2,000 or more during the year, a 1099-NEC may be required, assuming no exception applies.
It is also important to remember that not receiving a 1099 does not mean income is not taxable. Contractors and other business recipients are still responsible for reporting their income, even when they do not receive a 1099.
What About 2027 and Beyond?
The $2,000 threshold is the starting point for 2026. Beginning in 2027, the threshold will be adjusted for inflation. That means business owners will need to stay aware of future changes rather than assuming the threshold will always remain at $2,000.
Breakdown of what you need to do.
- Collect a completed W-9 from any business or individual who provides services to your business. Think of professionals such as your friendly Grand Junction CPA or tax accountant, consultant, photographer, mechanic, repair technician, and other independent service providers.
- Keep track of all payments made to each service provider throughout the year. Maintaining accurate records will make it much easier to determine who needs to receive a 1099 at year-end.
- If you need help, please let us know. As your local CPA and tax accountant in Grand Junction, CO, Synergy Tax & Accounting can help you understand what these changes mean for your business and keep you on track.
Our goal is simple: make taxes and accounting clear for you so you can spend less time worrying about paperwork and more time running your business.
If you have questions about 1099s, contractor payments, or your business taxes, we’re here to help.
