1099 Filing Requirements for 2026: Who Must Send One

TL;DR: If you run a trade or business and paid a non-corporation $2,000 or more during 2026 for services, you generally owe that payee a Form 1099-NEC, filed with the IRS and sent to the payee by January 31. The threshold rose from $600 to $2,000 for 2026 payments. You skip the form for payments to corporations (with a couple of exceptions) and for anything you paid by card or through a service like PayPal, because the processor reports those on a 1099-K instead. Get a Form W-9 from every contractor before you pay them, so January is a lookup, not a scramble.

Most people meet the 1099 as something that lands in their mailbox. The filing requirements are about the other side of that transaction: when you are the one who has to send one. The surest way to get it right is to keep a running record of who you paid and how, using an expense tracker that stamps every payment with a vendor name, so you are not reconstructing a year of invoices in the last week of January.

Who has to file a 1099?

The IRS ties the obligation to being in business. On its guidance page Am I required to file a Form 1099 or other information return?, the agency says you file an information return when, in the course of your trade or business, you make a reportable payment. If you are not engaged in a trade or business, you do not file at all. Hire a neighbor's teenager to mow your home lawn and no 1099 question arises, but hire that same teenager to mow the lawn at your rental property, and it can.

The common case is Form 1099-NEC for nonemployee compensation: money your business paid to someone who worked for it but is not on your payroll. A freelance designer, an off-payroll bookkeeper, a plumber who fixed the office sink, a subcontractor on a job. If you are not sure whether a worker is a contractor or an employee in the first place, that classification question comes before the form; our guide on 1099 vs W-2 walks the three-factor test.

Three conditions have to line up before a 1099-NEC is due:

• The payment was made in the course of your trade or business.
• The recipient is not a corporation (with narrow exceptions below).
• The total you paid that recipient for the year reaches the reporting threshold.

The $2,000 threshold for 2026 (up from $600)

For decades the magic number was $600. That changed. The IRS Instructions for Forms 1099-MISC and 1099-NEC state that for payments made before 2026 the reporting threshold is $600, and for payments made in 2026 the reporting threshold is $2,000. For years after 2026 the figure is inflation-adjusted, so expect it to keep drifting up.

The threshold is per recipient for the whole year, not per payment. Four $700 invoices from the same contractor total $2,800, which clears $2,000, so a 1099-NEC is due even though no single check hit the line.

Form 1099-MISC covers the other payment types, and each box carries its own threshold:

Two rows catch people out. Royalties trigger a form at just $10. Gross proceeds paid to an attorney (the full amount of a settlement routed through a lawyer, for instance) stay at the old $600 line and are reported even when the lawyer's firm is incorporated. For the full box-by-box map of which payment goes on which form, see 1099-NEC vs 1099-MISC.

Which payments do not need a 1099

Clearing the threshold is not the end of the test. Several large categories of payment are carved out.

Payments to corporations. The 1099-NEC/1099-MISC instructions say payments to a business that is incorporated are generally not reportable. If your contractor operates as a C corporation or an S corporation, you usually do not send them a 1099. The exceptions are legal and medical: attorneys' fees and gross proceeds paid to attorneys are reportable even to a law firm that is incorporated, and so are medical and health care payments. This is exactly why a W-9 matters. The entity type a payee checks on that form tells you whether the corporation exception applies before you cut the check.

Payments you made by card or through a payment app. This one saves a lot of duplicate forms. The IRS instructions state that payments made with a credit card or payment card, and certain other payments, "must be reported on Form 1099-K by the payment settlement entity under section 6050W" and "are not subject to reporting on Form 1099-MISC or Form 1099-NEC." If you paid a contractor's invoice with a business credit card or through a third-party network like PayPal, the processor handles the reporting on a 1099-K. You report only what you paid by cash, check, or direct bank transfer. Knowing how you paid each vendor is the difference between sending a correct 1099 and double-reporting a payment the card network already covered.

Personal, non-business payments. Reimbursing a friend or splitting a dinner is not a trade-or-business payment, so no 1099.

How to file: W-9 first, then the forms

The workflow that keeps January calm starts months earlier.

Step 1: Collect a Form W-9 before you pay. Ask every new contractor for a completed Form W-9 before their first payment. It gives you their legal name, taxpayer identification number (TIN), and entity type. Our walkthrough on how to fill out a W-9 covers the single-member-LLC trap that trips up both sides. If a contractor refuses to give you a TIN, you are required to apply backup withholding: the IRS backup withholding page sets the current rate at 24 percent, which you hold back from the payment and remit to the IRS.

Step 2: Total each vendor for the year. Add up everything you paid each recipient by cash, check, or bank transfer. Anyone at or above their threshold gets a form.

Step 3: File and furnish by the deadline. The dates differ by form:

Step 4: E-file if you have 10 or more. For returns due on or after January 1, 2024, the IRS requires electronic filing once you have 10 or more information returns in total. The count aggregates across form types, so five 1099-NECs plus five W-2s already puts you over the line.

What it costs to skip it

A missed or late 1099 carries a per-return penalty that climbs the longer it waits. These are the amounts on the IRS information return penalties page for returns due in 2026:

Two details make this bite harder than the table suggests. The penalty is per return, so twenty late 1099-NECs after August 1 is $6,800, not $340. And the amount above is for failing to file with the IRS; a separate, parallel penalty applies for failing to furnish the payee their copy, so a form you skip entirely can draw both. Our post on the 1099 late filing penalty breaks down how the two stack and when a reasonable-cause abatement is worth requesting.

How SparkReceipt fits

SparkReceipt does not file your 1099s or e-file information returns, and it is not a payroll service. What it does is remove the January scramble by keeping the record those forms depend on. Every expense you scan is stamped with the vendor name, the amount, the date, and the payment method, so when you need a per-vendor total you filter your expense reports by vendor and read the number off instead of digging through a year of invoices.

Because each payment also records how you paid, you can separate the check-and-transfer payments that need a 1099 from the card and PayPal payments that the processor already reports on a 1099-K. Upload your bank statements and SparkReceipt extracts and categorizes every line, which is how the vendors you forgot to invoice-track still surface before the deadline. When you are ready to try it, see pricing and start a free trial.

Frequently asked questions

Do I send a 1099 to an LLC? It depends on how the LLC is taxed, which is why you need the W-9. A single-member LLC or a partnership-taxed LLC is treated as a non-corporation, so it gets a 1099 once it clears the threshold. An LLC that elected to be taxed as an S or C corporation falls under the corporation exception. The W-9 entity box tells you which.

I paid a contractor $2,500 but all of it by credit card. Do I still file? No. Card and third-party-network payments are reported by the processor on a 1099-K, and the IRS instructions say those payments are not reported on a 1099-NEC or 1099-MISC. You would file only if you also paid part of the $2,500 by cash, check, or bank transfer and that part reached $2,000.

What if I do not have the contractor's TIN by January 31? File the 1099 on time with the information you have and request the missing TIN. Filing late to chase a number costs more than filing with a documented good-faith effort. Going forward, apply the 24 percent backup withholding until the contractor provides a valid TIN on a W-9.

Does the $2,000 threshold apply to the 2025 forms I file in early 2026? No. The $2,000 threshold applies to payments made in 2026, which you report in early 2027. Payments made in 2025 still use the $600 threshold.

Do I file a 1099 for materials or products? A 1099-NEC covers payments for services, including the parts and materials a service provider supplied as part of the job. Buying finished goods from a vendor you resell is different and generally is not a 1099-NEC payment.

Key takeaways

• A 1099 is a filing obligation on the payer: if your business paid a non-corporation $2,000 or more in 2026 for services by cash, check, or transfer, a 1099-NEC is due.
• The threshold jumped from $600 to $2,000 for 2026 payments and is inflation-adjusted after that, so verify the current figure each year.
• Payments to corporations are exempt except for attorney and medical payments, and card or payment-app transactions are reported on a 1099-K by the processor, not by you.
• Collect a Form W-9 before the first payment; it gives you the TIN and entity type, and a missing TIN forces 24 percent backup withholding.
• File and furnish 1099-NECs by January 31, e-file once you have 10 or more returns, and remember the penalty is per return.