Tax Return Changes for Freelancers Paying Contractors | HelloBooks Freelancers who subcontract work file fewer 1099-NECs from 2026, when the threshold rises to $2,000. What to collect and what still applies.
Freelancers who hand work to other freelancers often forget they are payers too. The higher 1099 threshold cuts their filing load from 2026, but not to zero.
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1099-NEC threshold for 2026 payments
$2,000
Applies: Payments made from January 1, 2026From IRS.gov · checked October 10, 2026
For payments made in 2026 the 1099-NEC threshold is $2,000, indexed for inflation after that; the $600 threshold still applies to 2025 payments. Some boxes keep their own thresholds, such as gross proceeds paid to an attorney.
Freelancers with at least $1,000 of QBI get a QBI deduction of at least $400 from 2026.
Record subcontractor payments against named vendors, not as general expenses, and collect a W-9 before the first payment. HelloBooks then totals each contractor toward the threshold, so you know in December who needs a form.
The plain-English summary for business owners
Information returns · payments from 2026
Business returns · Form 8995
By client type · gig workers and creators
General information for tax professionals, not advice on a specific return. Figures are from IRS.gov on the date shown; check the current IRS instructions before filing.
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