When do I have to send a contractor a 1099-NEC?
Short answer: For payments made in 2025, at $600 or more. For payments made in 2026 and later, the threshold rises to $2,000, adjusted for inflation starting in 2027.
Businesses send Form 1099-NEC to non-employee contractors they pay for services. The One Big Beautiful Bill Act changed the threshold:
- Payments made in 2025 (forms filed in early 2026): $600 or more.
- Payments made in 2026 (forms filed in early 2027): $2,000 or more, with inflation adjustments starting in 2027.
The form goes to the contractor and the IRS by January 31. Collect a Form W-9 from every contractor before you pay them, even small ones.
The contractor still owes tax on all of their income, whether or not they receive a 1099.
General information from Davis Schuler & Associates, LLC, not advice for your situation. Tax rules and thresholds change; confirm the current rules before acting.
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