For payments your business makes in 2026, the IRS reporting threshold for Form 1099-NEC is $2,000, up from $600. If you paid a contractor $2,000 or more during 2026 for services, you generally need to send them a 1099-NEC and file a copy with the IRS. If your total payments to that contractor for the year stayed under $2,000, you generally don't need to, unless you withheld federal income tax under the backup withholding rules.
This is the first filing season under the new number, and it matters for any business that pays subcontractors, freelancers or other outside help. The $2,000 is a yearly total for each payee, so several smaller payments to the same person add up. The same $2,000 threshold now applies to most Form 1099-MISC payments too, such as rents and prizes. For payments made after 2026, the IRS says the threshold will be adjusted for inflation.
Who needs a 1099 from my business?
According to the IRS instructions for Form 1099-NEC, you generally report a payment as nonemployee compensation when all four of these are true:
You paid someone who is not your employee.
You paid them for services in the course of your trade or business.
You paid an individual, a partnership, an estate or, in some cases, a corporation.
Your payments to them totaled at least $2,000 for the year.
Parts and materials count when they are part of the services you paid for. Payments for things like merchandise, freight, storage and telephone service generally don't need a 1099-NEC.
Families, this part is for you: personal payments are not reportable. Only payments made in the course of a trade or business need a 1099. If you hired someone to paint your house, that's a personal payment, not a business one.
If a contractor won't give you a correct taxpayer identification number, you may have to withhold 24% from their payments under the backup withholding rules. If you withhold any federal income tax that way, you must file a 1099-NEC for that person no matter how much you paid them.
Do I need to send a 1099 to an LLC?
It depends on how the LLC is taxed.
Single-member LLC that is a disregarded entity: treat it like its owner. The IRS has you enter the owner's name on the first name line and the LLC's name on the second.
LLC taxed as a partnership: payments to partnerships are generally reportable, so a 1099-NEC is usually required once you reach $2,000.
LLC taxed as a C or S corporation: payments to corporations generally don't need a 1099-NEC.
The same corporation rule covers S corps and C corps that aren't LLCs. The big exception is attorneys' fees, which you generally report on a 1099-NEC even when the law firm is a corporation.
How do you know which kind of LLC you're paying? Ask for a Form W-9. The IRS suggests requesting a W-9 to get a payee's taxpayer identification number, and line 3a of the form is where the payee checks its federal tax classification. The easiest time to collect a W-9 is before you make the first payment. If you're missing any, ask now, before year-end.
Do I need to send a 1099 if I pay through Venmo?
The IRS instructions say payments made with a credit card or payment card, along with certain other payments including third-party network transactions, are reported on Form 1099-K by the payment settlement entity. They are not reported on Form 1099-NEC or Form 1099-MISC.
In practice, that means when you pay a contractor through a card or a payment app that processes it as a business payment, the payment company handles the reporting, and you leave those payments off your 1099-NEC. Payments you make by cash or check are still yours to report. If you're not sure how an app processed a payment, check before you file.
When are 1099s due in 2027?
Form 1099-NEC is due to both the contractor and the IRS by January 31. In 2027, January 31 falls on a Sunday, so the deadline moves to the next business day: Monday, February 1, 2027. Form 1099-NEC has no later filing date for the IRS copy, so plan to finish both copies at the same time.
If you have employees, Forms W-2 for 2026 are due to your employees and to the Social Security Administration by February 1, 2027 as well.
If you will file 10 or more information returns during the year, the IRS requires you to file them electronically. That count combines form types rather than applying to each form separately.
Getting ready before January. A short to-do list for this month and next:
Pull a list of everyone your business paid in 2026 who isn't an employee.
Add up each person's total for the year, leaving out card and payment app payments.
Flag everyone at $2,000 or more and check whether they're a corporation.
Request a W-9 from anyone you don't have one for.
This is much easier when your books are kept up every month. With clean monthly bookkeeping, your contractor totals are a report you can run, not a shoebox you have to dig through in January. Business owners who want bookkeeping, their business tax return and year-round tax strategy handled by one team can look at Bookkeeping+. If you have employees, our payroll add-on keeps payroll tied directly to your books, and our tax preparation team handles business and personal returns.
Arena Accounting is based in Moore, OK, and works with small business owners and families all across the country by phone or video, with a licensed CPA on the team. We work in QuickBooks Online and Drake. Every business is different, so we quote a flat monthly price after a free consultation.
Questions about who needs a 1099 from your business? Let's talk.
This article is general information, not tax or accounting advice for your specific situation. Every business is different, so talk with a tax professional before acting.