2026 Changes to Form 1099 Reporting: What Businesses Should Know
Businesses should be aware of several important changes affecting Forms 1099-MISC and 1099-NEC for payments made during the 2026 calendar year. These forms will be prepared and filed in early 2027.
Reporting Threshold Increases to $2,000
Beginning with payments made in 2026, the federal reporting threshold for certain payments reported on Forms 1099-MISC and 1099-NEC increases from $600 to $2,000. This generally means that a business will be required to issue a Form 1099-NEC to a qualifying independent contractor or service provider when reportable payments total $2,000 or more during 2026. The increased threshold also applies to certain payments reported on Form 1099-MISC.
The threshold may be adjusted for inflation beginning in 2027. It is important to remember that different reporting thresholds may continue to apply depending on the type of payment, and payments may still be reportable below the regular threshold when federal income tax has been withheld under the backup-withholding rules.
Updated Forms for 2026
The IRS has also revised Forms 1099-NEC and 1099-MISC for reporting 2026 payments. The updated forms include separately identified fields for:
- Cash tips;
- Treasury Tipped Occupation Codes; and
- Qualified overtime compensation.
On Form 1099-NEC, these amounts will be reported in new Boxes 1b, 1c, and 1d. Similar fields have been added to Form 1099-MISC. The payer and recipient address sections have also been reformatted into separate address fields. Businesses must use the December 2026 revisions of the forms when reporting 2026 payments in early 2027.
Prepare Before Year-End
Although the forms will not be filed until 2027, businesses should begin preparing now. Review vendor records, obtain completed Forms W-9 from new vendors before issuing payment, and confirm that names, addresses, taxpayer identification numbers, and entity classifications are accurate.
Businesses should continue tracking all potentially reportable payments throughout the year, even when payments are currently below the new $2,000 threshold. Proper recordkeeping will help avoid delays, corrections, and potential penalties during the 2027 filing season.
Please contact DBMCPA with questions about how the updated reporting requirements may apply to your business.
