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The 1099 Threshold for 2026 Is $2,000: Who Counts, and Which Payments Don't

For payments made in 2026, a 1099-NEC is needed for a contractor paid $2,000 or more, up from $600. Card and business PayPal payments don't count toward it.

Published 2026-11-03

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In 20 seconds

  • $2,000 per contractor for payments made in 2026. It was $600.
  • Card payments, and business payments through PayPal or Stripe, don't count.
  • Corporations usually don't get one. Collect a W-9 before you pay.
  • Forms for 2026 are due January 31, 2027.

What is the 1099 threshold for 2026?

Set by P.L. 119-21, the One Big Beautiful Bill Act, and adjusted for inflation from 2027. Once a contractor reaches it, the form reports everything you paid them.

  • $2,000: per contractor, paid in 2026
  • $600: for payments made in 2025
  • Jan 31: deadline for the 2026 forms

Which payments count?

  • Check, ACH, wire or bank transfer: Counts toward the $2,000.
  • Credit or debit card: Doesn't count. The card network reports it on a 1099-K.
  • PayPal, Venmo, Stripe as a business payment: Doesn't count. The network reports it on a 1099-K.
  • PayPal or Venmo as a personal payment: The app doesn't report it. Ask your accountant.
  • Zelle: The IRS doesn't name it either way. Ask your accountant.

Who usually doesn't need one

  • Corporations, including an LLC taxed as a C or S corporation.
  • Except: legal and medical services are reported even to a corporation.
  • Gross proceeds paid to an attorney keep a $600 threshold.
  • Rent paid to a landlord can need a 1099-MISC. Ask your accountant.

Ask your assistant who may need one

Connected to Even Margin, Claude lists everyone you paid this year, how you paid them, and who may need a form.

Two habits that make January easy

  • Get a W-9 before the first payment: it says whether they are a corporation and gives you their tax number.
  • No correct tax number from a payee means holding back 24% of later payments as backup withholding.

What a late form costs

IRS penalties per form, for returns due in 2027.

  • $60: up to 30 days late
  • $130: from then through August 1
  • $340: after August 1, or never sent

The 1099-K threshold for 2026 is $20,000

Platforms like PayPal or Etsy send you a 1099-K only when you received over $20,000 and over 200 transactions in the year. The income is taxable either way.

Build your list in Even Margin

  • Filter your transactions by Contract Labor (1099) and 2026.
  • Search each payee to see every payment and the account it came from, so card payments stand out.
  • Export the list for your accountant.

Sources

About this guide

This guide explains bookkeeping in general terms. For how something is treated on your tax return, ask your accountant.

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