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New Rules For 1099 Forms
| As of the 2026 tax year, within the new federal regulations known as the One Big Beautiful Bill Act, there are new rules for companies and freelancers using 1099 forms to report income. The following is a breakdown of the key updates and how to stay compliant. Form 1099-MISC and 1099-NEC thresholds are increasing. Starting with payments made in 2026, businesses will only need to issue these forms if they pay a freelancer or contractor $2,000 or more in a calendar year. This is a significant jump from the previous $600 threshold. Form 1099-K thresholds are reverting to the original standard: $20,000 in payments and more than 200 transactions. This change overrides the previously planned lower thresholds of $2,500 in 2025 and $600 in 2026. Beginning in 2027, the $2,000 threshold for 1099-MISC and 1099-NEC will be adjusted annually for inflation. NOTE: For the 2025 tax year, the current $600 threshold will still apply to Form 1099-NEC and 1099-MISC. However, the restored Form 1099-K threshold of $20,000 and 200 transactions applies to 2025. |