The One Big Beautiful Bill Act, enacted in 2025, introduced changes to the reporting thresholds for certain Forms 1099. These updates are now in effect as we move through 2026.

What Changed?

The reporting threshold for issuing certain Forms 1099 has increased:

• Form 1099-NEC (Nonemployee Compensation)
• Form 1099-MISC (certain payments such as rents, prizes, etc.)
• Previous threshold: $600
• New threshold: $2,000

When Does This Apply?

• Applies to payments made in 2026
• First filings under the new rule are due January 2027

Important: For 2025 payments, the $600 threshold still applied.

What This Means for Your Business

• For 2026 payments, you are not required to issue a 1099-NEC or 1099-MISC unless total payments to a vendor exceed $2,000
• This change will reduce the number of forms many businesses need to prepare and file
• You should still track all payments carefully, especially during this transition year

Important Clarification

This change impacts reporting requirements only—not tax liability.

• All income remains fully taxable, regardless of whether a Form 1099 is issued
• Vendors and contractors are still required to report all income received

Related Update: 1099-K Threshold

The reporting threshold for Form 1099-K (used by payment platforms like PayPal and Venmo) remains:

• $20,000 in payments AND 200 transactions

This is separate from contractor reporting requirements.

Bottom Line

The new $2,000 threshold simplifies reporting for many businesses, but it does not change the underlying tax obligations. Strong recordkeeping and compliance remain essential.

If you have questions about how this change affects your specific situation, feel free to reach out to our office.

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Under U.S. Treasury regulations, any tax advice in this communication is not intended or written to be used to avoid IRS penalties. Tzinberg & Associates provides this information for general guidance only. It does not constitute tax advice, accounting services, investment advice, or professional consulting. Consult a professional adviser before making decisions or taking action, as the information is provided "as is" without any warranties regarding its completeness, accuracy, or timeliness.