Quick answer
For contractor payments made in 2026, you file Form 1099-NEC only for contractors you paid $2,000 or more during the year, up from $600. Forms for 2026 payments are due to contractors and the IRS on February 1, 2027.
Why it matters: fewer forms does not mean less tracking. You still need to know who you paid, how much, and how you paid them. The owners who walk into January calm are the ones who review contractor records in November. This post gives you the checklist and a W-9 request script to do it.
What changed with the 1099-NEC threshold for 2026?
The One Big Beautiful Bill Act raised the Form 1099-NEC reporting threshold from $600 to $2,000 for payments made after December 31, 2025. The IRS reflects the change in its Instructions for Forms 1099-MISC and 1099-NEC.
Three details matter for your records:
The threshold is per contractor, for the full year. Three $700 payments to the same person add up to $2,100, which crosses the line.
Once a contractor reaches $2,000, the form reports everything you paid them that year, not just the amount above $2,000.
Payments made in 2025 still follow the $600 rule, so any correction to a 2025 form uses the old threshold.
When are 2026 Forms 1099-NEC due?
February 1, 2027. That date applies to both copies: the one you give the contractor and the one you file with the IRS. January 31, 2027 falls on a Sunday, so the deadline moves to the next business day.
Put it on your calendar now. The forms themselves take minutes to prepare. Chasing a missing W-9 in the last week of January is what takes days.
Does a higher threshold mean less record-keeping?
No. The threshold decides who gets a form. It does not change what your books need to show.
Fewer forms does not mean less tracking. You still need contractor totals to support the expense on your own return, to see what delivery really costs (contractor spend is a big part of measuring client profitability), and to catch anyone who crosses $2,000 late in the year. A contractor at $1,800 in November can pass $2,000 with one December invoice.
The same totals show up in the monthly financial reports every owner should review. If they are miscoded there, every decision built on them is off too.
Which contractor payments don't go on a 1099-NEC?
How you paid matters as much as how much you paid. Under the IRS instructions, payments made by credit card, payment card, or through a third-party payment network are reported on Form 1099-K by the payment settlement entity. They are not reported by you on Form 1099-NEC.
Other common exceptions in the IRS instructions:
Payments to corporations are generally not reported, with limited exceptions such as fees paid to attorneys. The contractor's W-9 shows their tax classification.
Personal payments that were not made in the course of your trade or business.
If you paid one contractor both ways, by bank transfer and by card, separate the two in your records and confirm the reporting with your tax professional.
Your year-end contractor records checklist
Block 30 minutes and work down this list. If you already hold a monthly money date, make November's session about contractors.
List every contractor you paid in 2026 with their name, business name, and total paid so far.
Confirm a W-9 is on file for each one. Request the missing ones this week.
Flag anyone at or near $2,000 for the year, and watch their December invoices.
Note how each contractor was paid: bank transfer, check, card, or payment app.
Check each W-9's tax classification so you know who is a corporation.
Confirm contractor payments are coded to a contractor expense account, not mixed into other categories.
In your accounting software, mark contractors as 1099 vendors so their payments roll into the year-end report.
Match contractor totals in your books to your bank and card statements.
Confirm each contractor's mailing address and email so forms reach them.
Add February 1, 2027 to your calendar, and send anything unclear to your tax professional.
How do I ask a contractor for a W-9?
Keep the request short and give a date. Here is a script you can copy:
"Hi [Name], I'm closing out this year's books. Could you send me a completed Form W-9 by [date]? It's the IRS form I keep on file for contractor payments. You can download it here. Thank you!"
If you don't hear back within a week, send a short follow-up:
"Hi [Name], following up on the W-9 I asked for on [date]. I'm finalizing year-end records this week. Could you send it by [date]? Here's the link again: [link]. Thank you!"
Going forward, request the W-9 before the first payment and make it part of contractor onboarding. Then this list gets shorter every year.
Why do this in November instead of January?
Every item on the checklist is easier now. Statements are fresh, contractors respond faster before the holidays, and you still have time to fix miscoded transactions before the year closes. In January, the same tasks compete with year-end close, tax prep, and the February 1 deadline.
Clean contractor totals also sharpen your 13-week cash flow forecast for Q1, since contractor costs are often one of your largest outflows. And if contractor tracking slips every year, that is a signal worth reading. Here is how to tell whether you need a virtual CFO when you already have a bookkeeper.
Key takeaways
For 2026 payments, the 1099-NEC threshold is $2,000 per contractor for the year, up from $600.
Forms for 2026 payments are due to contractors and the IRS on February 1, 2027.
Card and payment network payments are generally reported by the payment company on Form 1099-K, not by you on a 1099-NEC.
Payments to corporations are generally excluded, with limited exceptions.
Fewer forms does not mean less tracking. Your books still need every contractor payment.
Thirty minutes in November saves days in January.
Frequently asked questions
What is the 1099-NEC threshold for 2026?
For payments made in 2026, you file Form 1099-NEC for each contractor you paid $2,000 or more during the year. The threshold was $600 for payments made in 2025 and earlier. The change comes from the One Big Beautiful Bill Act and is reflected in the IRS instructions for Forms 1099-MISC and 1099-NEC.
Do I need to file a 1099-NEC for a contractor I paid $1,500 in 2026?
No. If your total payments to that contractor for 2026 stay below $2,000, no 1099-NEC is required. Keep your records anyway. You still need them to support the expense, and the contractor still reports the income.
When is Form 1099-NEC due for 2026 payments?
February 1, 2027, for both the copy you give the contractor and the copy you file with the IRS. January 31, 2027 falls on a Sunday, so the deadline moves to the next business day.
Do I send a 1099-NEC if I paid a contractor by credit card or a payment app?
Generally no. Payments made by credit card, payment card, or through a third-party payment network are reported by the payment settlement entity on Form 1099-K, not by you on Form 1099-NEC. Note how each contractor was paid, and confirm mixed situations with your tax professional.
Does the $2,000 threshold apply per payment or per year?
Per year. The threshold applies to your total payments to one contractor during the calendar year. Three $700 payments to the same person by check or bank transfer total $2,100, which requires a 1099-NEC.
Will the $2,000 threshold change after 2026?
Possibly. The IRS says the threshold is scheduled to be adjusted for inflation after 2026. Confirm the current figure in the IRS instructions before each filing season.
Should I still collect a W-9 from contractors paid under $2,000?
Yes, it is good practice. A contractor below $2,000 in November can cross it with one December invoice. Having the W-9 on file before you pay keeps you from chasing it in January.
Your next step
Block 30 minutes this week and work the checklist above. If you find gaps you would rather not clean up alone, bring them to Virtual CFO Office Hours, or let our team handle it through Bookkeeping and Advisory Services.
This is general education, not tax advice. Check your own situation with your tax professional.