On the small business community, seeing a lot of confusion about this from the filing side, so a short summary of what actually changed.
For payments made after December 31, 2025, the general reporting threshold for 1099-NEC (nonemployee compensation) and 1099-MISC (rents, other income) went from $600 to $2,000. So a contractor you paid $1,850 in 2026 does not get a 1099-NEC.
Things that did NOT change, which is where people get caught:
- Royalties still trigger a 1099-MISC at $10.
- Direct sales of $5,000 or more are still reported.
- Backup withholding has no threshold. If you withheld federal tax on a payee at all, you report it at any amount.
- The $2,000 figure is indexed for inflation after 2026, so it will be a different number for tax year 2027. Don't hard-code it.
Also worth knowing: this doesn't change the W-9 question. You still want a W-9 on file before the first payment regardless of amount, because you don't know in March whether the year's total will cross $2,000.
Disclosure: We are a 1099 e-file platform. Happy to answer questions in the comments, not here to pitch.