- Before
- $600 in the year
- After
- $2,000 in the year
- Effective
- Payments made after Dec 31, 2025
What changed
Section 70433 of the One, Big, Beautiful Bill (Public Law 119-21) replaced $600 with $2,000 in the general information-reporting rule of the Internal Revenue Code, section 6041(a), and tied the reporting of payments for services under section 6041A to the same amount. The change applies to payments made after December 31, 2025.[1]
The IRS reflects this in its current instructions: Form 1099-NEC is filed for each person paid at least $2,000 in nonemployee compensation during the year,[2] and its contractor FAQ gives the threshold as "$600 ($2,000 for payments made after December 31, 2025)".[3] Payments made in 2025 stay at $600.
Which forms and boxes
- Form 1099-NEC, box 1a, nonemployee compensation.[2]
- Form 1099-MISC, including box 1 (rents), box 3 (other income) and box 6 (medical and health care payments).[2]
- Backup withholding on these payments follows the same threshold.[1][2]
The figure is not fixed for good. For calendar years after 2026 the law adjusts it for inflation, rounded to the nearest $100,[1] and the IRS says it may be adjusted beginning in calendar year 2027.[2]
What stays the same
- Card and payment-app payments. Payments made with a credit card or payment card, and third party network transactions, are reported on Form 1099-K by the payment settlement entity, not on Form 1099-NEC or 1099-MISC.[2]
- Payments to corporations, including an LLC taxed as a C or S corporation, are generally not reported, with exceptions the instructions list.[2]
- Form W-9 is still how a payee gives you the taxpayer identification number you need for an information return.[4]
What it means for online sellers
For a seller who pays photographers, designers, virtual assistants or copywriters, fewer of them will cross the line for a 1099-NEC. The tracking that decides it does not change: record each contractor's payments by payee and by payment method through the year, keep a W-9 on file, and the year-end count becomes a report rather than a search. If you would like that tracked for you, see 1099 filing for contractors.
Sources
- Public Law 119-21 (One, Big, Beautiful Bill Act), §70433, enacted July 4, 2025 (govinfo) fetched 7 Oct 2026
- IRS, Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026) fetched 7 Oct 2026
- IRS, Form 1099-NEC & independent contractors (FAQ, page last reviewed 23 Sep 2026) fetched 7 Oct 2026
- IRS, About Form W-9 (page last reviewed 27 Jun 2026) fetched 7 Oct 2026
General information about bookkeeping, not tax or legal advice for your situation.
How our articles are written and sourced: editorial policy.