New 1099 Rules for 2026: What Changed and What Didn’t

Key Points 

• Most 1099-NEC and 1099-MISC reporting now starts at $2,000 per payee, up from $600, for payments made on or after Jan. 1, 2026. 

• Keep collecting a W-9 from every vendor before the first payment, because the new threshold changes when you file, not what you need to collect. 

• The IRS FIRE system stops accepting returns on Nov. 19, 2026, so your 2026 forms will be filed through IRIS. 

For decades, business owners have planned their 1099s around one number: $600. That number has changed. Starting with the 2026 tax year, the threshold for most contractor and vendor reporting is $2,000. 

For many businesses, that means fewer forms. But the change comes with a few catches, and it lands in the same filing season the IRS is replacing the system many businesses use to file. Here’s what changed, what didn’t, and what to do before the forms are due. 

What changed with the 1099 threshold, and when does it apply? 

The reporting threshold for most payments on Forms 1099-NEC and 1099-MISC rose from $600 to $2,000 for payments made on or after Jan. 1, 2026. The change comes from the federal tax law passed in July 2025, and it applies to the forms you’ll send in early 2027. 

The date that matters is the date you paid, not the date of the work or the invoice. If a contractor finished a project in December 2025 and you paid them in January 2026, that payment falls under the new $2,000 rule. 

Most categories moved to $2,000, but a few stayed the same: 

The $2,000 amount is also set to adjust for inflation starting in 2027, so expect the number to move in future years. 

Should you still collect a W-9 from every vendor? 

Yes. Your W-9 process should stay exactly as it is: collect a completed form from every vendor before you make the first payment. 

A higher threshold means fewer forms, not fewer W-9s. Here’s why the habit still matters: 

• You can’t predict who will cross $2,000. Payments to the same vendor add up across the year, and a $400 job in March can reach $2,500 by October. 

• Backup withholding still applies. If payments reach the threshold and you don’t have a valid tax ID on file, you may need to withhold 24% of future payments and send it to the IRS. 

• Your state may not match. Not every state has adopted the federal $2,000 amount for its own reporting. 

Chasing a tax ID in January, after a vendor has been paid and moved on, is much harder than collecting it up front. A W-9 also confirms the vendor’s legal name and tax classification, which tells you whether a form is needed at all. 

Which form do you use: 1099-NEC or 1099-MISC? 

Use the 1099-NEC for payments for services and the 1099-MISC for most other business payments, such as the rent and medical payments in the table above. 

The same mistakes show up every filing season: 

Deadlines, penalties and the end of FIRE 

Filing deadlines 

The 1099-NEC is normally due Jan. 31. Because Jan. 31, 2027, falls on a Sunday, 2026 forms are due Monday, Feb. 1, 2027. There is no automatic extension for the 1099-NEC. 

If you file 10 or more information returns in total, including W-2s, you must file electronically. 

Penalties 

Penalties apply per form and grow the longer a correct form is late. For forms due in 2027: 

A separate penalty can apply for failing to send the recipient’s copy on time, so one missed form can cost you twice. Annual caps apply to the first three tiers, with lower caps for businesses with average annual gross receipts of $5 million or less. 

Moving from FIRE to IRIS 

If you’ve filed electronically with the IRS yourself, you likely used the FIRE system. The IRS is retiring it, and FIRE accepts returns only until 3 p.m. ET on Nov. 19, 2026. Tax year 2026 forms must be filed through the Information Returns Intake System, or IRIS. 

IRIS offers a free online portal for up to 100 returns at a time, by manual entry or CSV upload, plus a separate channel for software that files larger volumes. You’ll need an IRIS Transmitter Control Code, which is separate from any FIRE code you have now, so apply early. If a payroll provider or software company files for you, ask now whether it’s ready for IRIS. 

Your Year-End 1099 Checklist 

Run through this list before Jan. 31: 

• Pull a list of every vendor you paid in 2026 and total the payments to each. 

• Flag vendors paid $2,000 or more, plus attorneys paid $600 or more in gross proceeds and anyone paid royalties of $10 or more. 

• Take out payments made by credit card or through a payment platform. 

• Confirm you have a current W-9 for every vendor on the list, and request any missing ones now. 

• Check names and tax IDs against each W-9. 

• Sort payments between the 1099-NEC and 1099-MISC. 

• Review your state’s filing rules and threshold. 

• Set up IRIS access, or confirm your provider is ready. 

• Put Feb. 1, 2027, on your calendar for 1099-NEC filing and recipient copies. 

Getting Ahead of Filing Season 

The threshold moved, but the work that keeps filing season calm stays the same: good vendor records, current W-9s and a filing plan that’s ready before January. If you’d like a second set of eyes on your vendor list or filing process, reach out to our team.