Information Return Changes for 2026: 1099s and W-2s

1099, W-2 and information return changes

Information returns change in two directions at once. Fewer small contractor payments need a 1099 from 2026, while W-2s and 1099-Ks gain new boxes for tips and overtime. Both need setup in the client’s books and payroll long before January.

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1099-MISC and 1099-NEC thresholds by payment year

Box-level thresholds from the 2025 and 2026 instructions for Forms 1099-MISC and 1099-NEC. Not every box moved.

Payment	2025 payments	2026 payments
Nonemployee compensation (1099-NEC)	$600 or more	$2,000 or more
Rents (1099-MISC)	$600 or more	$2,000 or more
Other income (1099-MISC)	$600 or more	$2,000 or more
Royalties (1099-MISC)	$10 or more	$10 or more
Gross proceeds paid to an attorney (1099-MISC)	$600 or more	$600 or more

From the Instructions for Forms 1099-MISC and 1099-NEC (Rev. April 2025 and 12/2026) on IRS.gov.

The pages in this section

15 pages, grouped for review.

Thresholds and withholding

The 1099 threshold moves to $2,000: what changes in January 2027Threshold for 2026 payments: $2,000
Form 1099-K is back to $20,000 and 200 transactionsGross payments over: $20,000
Backup withholding on platform payments now follows the 1099-K testPlatform withholding starts above: $20,000 and 200 transactions

New boxes and codes

Form 1099-NEC changes for 2026: three new boxes and a new thresholdThreshold for 2026 payments: $2,000
Form 1099-MISC changes for 2026Threshold for most 2026 payments: $2,000
Form 1099-K changes for 2026: tips get their own boxesNew boxes: 1c cash tips, 1d occupation code
Form W-2 changes for 2026: new codes for tips, overtime and Trump accountsNew box 12 codes: TP, TT, TA
Tips and overtime reporting: what employers must track for 2026Penalty relief covered: 2025 only
Treasury tipped occupation codes: how the final list worksOccupations listed: More than 70

State filing

State 1099 filing and the CF/SF programParticipating jurisdictions: 32 listed in Pub 1220
State 1099-K thresholds that differ from federalFederal threshold: $20,000 and 200 transactions

Clients most affected

Tax return changes for freelancers who pay contractors1099-NEC threshold for 2026 payments: $2,000
Tax return changes for ecommerce sellers1099-K threshold: Over $20,000 and over 200 transactions
Tax return changes for gig workers and creatorsPlatform 1099-K threshold: Over $20,000 and over 200 transactions
Tax return changes for restaurants and barsStaff tips deduction, up to: $25,000 a year

January 2027 is the first run under the new rules

Forms for 2025 payments, filed in early 2026, still use the old thresholds. The 2026 payment year is the one to prepare for now, and the vendor setup has to be right from the first payment.

Keep collecting W-9s from every contractor, even those likely to stay under the threshold.
Track payments per vendor per box, because attorney gross proceeds and royalties kept their own thresholds.
Check each state the client files in for a lower state threshold.

Where HelloBooks fits

HelloBooks tracks contractor payments against the threshold for the payment year, stores W-9 details and prepares federal and state 1099-NEC and 1099-MISC data in Combined Federal/State Filing format. Direct e-filing to the IRS is not enabled, so the file goes through your usual filing channel.

Frequently asked questions

Did the 1099-K change also apply to 2025?

Yes. The return to the $20,000 and 200 transaction test is retroactive, so the lower thresholds that had been phasing in no longer apply to 2025.

Is the $2,000 threshold indexed?

Yes. It applies to payments made in 2026 and is adjusted for inflation in later years, so check the instructions each year.

1099, W-2 and information return changes

1099-MISC and 1099-NEC thresholds by payment year

The pages in this section

January 2027 is the first run under the new rules

Where HelloBooks fits

Frequently asked questions

Keep exploring

Sources

Start automating your books today

1099, W-2 and information return changes

1099-MISC and 1099-NEC thresholds by payment year

The pages in this section

January 2027 is the first run under the new rules

Where HelloBooks fits

Frequently asked questions

Keep exploring

Sources

Start automating your books today

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