If you run crews or hire subs, January is 1099 season, and this year the rules changed.
What changed
- $2,000 is the new threshold. For payments made in 2026, file a 1099-NEC once you’ve paid someone $2,000 or more in the year. It used to be $600. Add up every payment to the same person or business.
- It starts with the forms you file in early 2027, and adjusts for inflation from 2027 on.
- Payment apps went back to $20,000 and 200 transactions for 1099-Ks.
What didn’t
- The deadline. January 31, 2027 is a Sunday, so forms are due to contractors and the IRS on Monday, February 1, 2027.
- E-filing. Ten or more information returns in total must be e-filed. The IRS IRIS portal is free.
- Who gets one. Sole proprietors and most LLCs do. Most corporations don’t.
States that haven’t caught up
Not every state follows the new federal number. As of fall 2026, these states were reported to still require state 1099 reporting below $2,000:
- Massachusetts: $600
- Vermont: $600
- Mississippi: $600
- Wisconsin: $600
- New Jersey: $1,000
- Missouri: $1,200
State rules are still shifting, so confirm with your state’s revenue department before you file.
The checklist
- Get a W-9 before the first payment, every time. You never know in March who’ll cross the line by October.
- Run a 2026 vendor report by payee. Flag everyone at $2,000 or more, or your state’s lower number.
- Leave off card and payment-app payments. The processor reports those.
- Separate services from stuff. Labor goes on the 1099. Materials don’t. Rent goes on a 1099-MISC.
- File in mid-January, not on deadline day.
The CFO take
Fewer forms is nice, but 1099s are really a once-a-year check on your vendor records. If January is the only time you look at who you paid and why, your job costing is probably off too, and that’s where the real money hides.
Want your 1099s handled this year? Get in touch before the holidays eat December.
General information as of November 2026, not tax advice. Some payment types have their own thresholds, and state rules vary. Confirm your filing with your tax preparer.
Sources: Patriot Software; state thresholds compiled from TaxFormHero, Gigapay, Darkhorse CPA and Tax1099.
