New 1099 Reporting Thresholds: What’s Changing for 2025–2027

1099s are information returns that report payments your business makes to non-employees and certain vendors. They help the IRS match income and keep you compliant while avoiding penalties and messy clean-ups later.

For most small businesses, the two forms you’ll touch most are:
1099-NEC (contract labor) and 1099-MISC (rent and a few other categories).

Below is what’s changing and what to do next. Many small businesses will file fewer 1099s in the next couple of years.

The key change: Form 1099-NEC and 1099-MISC keep the traditional $600 threshold for 2025 payments, then increase to $2,000 for 2026 payments (with inflation adjustments starting 2027).

Common Forms Small Businesses Issue

• 1099-MISC — often for rent payments (typically Box 1).

• 1099-NEC — for nonemployee compensation/contract labor (Box 1).

Fast Facts

• 2026 filing season (covering 2025 payments): 1099-NEC / 1099-MISC use the $600 threshold (no change).

• 2027 filing season (covering 2026 payments): 1099-NEC / 1099-MISC move to a $2,000 threshold (indexed from 2027).

What Businesses Should Do Now

• Tighten your vendor list: Update payee records; confirm who is a W-9 vendor vs. a corporation.

• Collect/refresh W-9s for any payee you might cross $600 in 2025 or $2,000 in 2026.

• Adjust A/P rules: Update your accounting software’s 1099 flags and 2026 threshold logic.