The 2026 1099-NEC Threshold Is $2,000, Not $600

For decades the rule was simple: pay a contractor $600 or more in a year and you issue a 1099-NEC. For payments made in 2026 and later, that number is $2,000. If a vendor checklist, a client memo, or an older article still says $600 for this year, it is out of date.

What changed, and from when

The change came from the One Big Beautiful Bill Act (Public Law 119-21). Section 70433 amended the code sections that set the reporting threshold for nonemployee compensation and miscellaneous income. It applies to payments made after December 31, 2025, and the $2,000 figure is adjusted for inflation starting in 2027.

That makes the year the payment was made the thing to check, not the year the form is filed:

• Payments made in 2025 (forms due in early 2026): $600.
• Payments made in 2026 (forms due in early 2027): $2,000.
• Payments made in 2027 and later: $2,000, adjusted for inflation. The adjusted figure is not final until it is published.

What did not change

• The income is still taxable. The threshold decides whether the payer files a form, not whether the vendor reports the income. A contractor paid $1,500 still owes tax on it.
• The 1099-K threshold is a separate rule. The same law restored it to $20,000 and more than 200 transactions. Different form, different payer, different test.
• State rules can differ. Some states set their own filing thresholds or require copies of federal forms. Check the state before you drop a vendor from the list.
• Backup withholding. The same legislation also amended backup withholding requirements. Confirm the current IRS instructions before relying on an old $600 figure for that.

Paid by card? It may not belong on your 1099-NEC at all

Payments made by credit card, or through a third-party payment network, are generally reported by the processor on a 1099-K rather than by the payer on a 1099-NEC. A vendor total made up mostly of card payments may not need a form from you, whatever the threshold is. This is one reason the 1099-K and 1099-NEC overlap needs care.

Do not stop collecting W-9s

A higher threshold means fewer forms. It does not make the W-9 optional as a habit. A vendor at $1,400 in August can be at $2,300 by December, and collecting a TIN in late January under deadline pressure is how bad numbers end up on forms. A vendor list sorted by year-to-date total, with each TIN's format checked (see why 1099-NEC forms get rejected), takes a few minutes in November.

Using the checker

The 1099-NEC check in the tool asks which year the payments were made. It applies $600 for 2025 and $2,000 for 2026 and later. For 2027 it uses $2,000 until the inflation-adjusted figure is published, so check that year's number before you rely on it.