Why it matters
For tax year 2025 payments, still being closed out, Form 1099-NEC and most Form 1099-MISC boxes use the older $600 threshold. For tax year 2026 payments the minimum is $2,000. Royalties stay at $10 and attorney gross proceeds at $600 on Form 1099-MISC. Payments to C or S corporations are generally exempt, except legal fees. The threshold change does not move any due date.
Example
In 2026 a client paid a designer $2,400 and a landscaping S corporation $5,000. The designer gets Form 1099-NEC because $2,400 exceeds $2,000; the S corporation generally gets none. Had the $2,400 been paid in 2025, the $600 rule applied and the form was due February 2, 2026. If the designer never gives a TIN, 24 percent backup withholding applies.
Related terms
Questions about 1099 forms
Which 1099 form covers what, and what is the threshold?
Form 1099-NEC reports nonemployee pay: $2,000 for tax year 2026, $600 for 2025. Form 1099-MISC reports rents, prizes, medical payments and royalties: $2,000 for most boxes from 2026, $10 royalties, $600 attorney proceeds. Form 1099-INT starts at $10 of interest. Form 1099-DIV and Form 1099-R come from financial institutions and plan payers; Form 1099-K from payment settlement entities.
When are 1099 forms due, and what is Form 1096?
For tax year 2025, Form 1099-NEC was due February 2, 2026; other forms March 2, 2026 on paper or March 31, 2026 electronically. For 2026, recipient copies are due January 31. Form 1096 is the cover sheet for paper Copy A, one per form type. Ten or more returns must be e-filed; the maximum penalty is $340 per return. Form 8809 gives a 30-day extension; it is separate from a Form 1040 extension.
What should a firm collect from a client before 1099 season?
Before the first payment, send: "Please return a completed Form W-9 with your legal name, tax classification and TIN before we pay your invoice." In January, export total paid per payee from the general ledger and match it to the W-9 file. Recipients get Copy 2 for their state return. Without a correct TIN, backup withholding is 24 percent.