The 1099 threshold moves to $2,000: what changes in January 2027

The reporting threshold for most 1099-NEC and 1099-MISC payments rises from $600 to $2,000 for payments made in 2026, and it is indexed for inflation after that. The $600 threshold still applies to the 2025 forms filed in early 2026.

Not every box moved. Gross proceeds paid to an attorney, for example, keep their own rule, so check the 1099-MISC and 1099-NEC instructions box by box rather than applying one number to every payment. Publication 1099 also ties the backup withholding threshold to the new amount.

Fewer small contractors will need a form, but you still need a W-9 on file for every one of them, because you only know who crosses the threshold at year-end. The electronic filing rule is unchanged: a payer filing 10 or more information returns in total must e-file.

• Update your client letter so business owners stop sending you $600-level vendor lists for 2026.
• Keep collecting W-9s at onboarding, since the threshold is an annual total per payee.
• Re-check any client process that issues 1099s by default at $600.

HelloBooks totals every payment to each contractor as it is posted and flags the vendors who cross the threshold for the year, using the right threshold for the payment year. It holds the W-9 details and prepares the federal and state 1099-NEC and 1099-MISC set in Combined Federal/State Filing format, which you or your filing agent then submit.