How to Issue a 1099-NEC for Tax Year 2026: Steps, Deadlines, and the $2,000 Threshold

For tax year 2026, you generally issue Form 1099-NEC to each independent contractor you paid $2,000 or more for services. You send Copy B to the contractor and file Copy A with the IRS by Monday, February 1, 2027. Three things to know this year are the higher reporting threshold, the February 1 due date, and the new IRS system you e-file through.

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What's new for 1099-NEC forms for tax year 2026

Tax year 2026 covers payments you made to independent contractors from January 1 through December 31, 2026. You file the 1099-NEC forms for those payments in early 2027.

The One Big Beautiful Bill Act raised the threshold for payments made to independent contractors after December 31, 2025, as the IRS Instructions for Forms 1099-MISC and 1099-NEC explain. The threshold is adjusted for inflation after 2026, so confirm the current figure each year before you file.

IRS Publication 1099 sets out the rule that moves a weekend due date to the next business day. The IRS announced the FIRE retirement date in its notice on the transition to the Information Returns Intake System (IRIS).

Who gets a 1099-NEC for payments you made in 2026

You generally issue a 1099-NEC to each independent contractor, such as a freelancer or consultant, you paid $2,000 or more for services during 2026. Payments to corporations are generally not reported, and three situations work differently:

• Payments for legal services are generally reportable, even when the law firm is incorporated. The usual exception for corporations doesn't apply to attorneys' fees, so plan to issue a 1099-NEC to any law firm you paid $2,000 or more for legal services.
• Payment-card and third-party network payments are generally reported on Form 1099-K instead. Don't include amounts processed as payment-card or third-party network transactions on a 1099-NEC. The payment settlement entity, rather than your business, is generally responsible for reporting those transactions on Form 1099-K. Payments made directly by check, cash, ACH, or another bank transfer generally count toward your Form 1099-NEC total.
• Backup withholding requires a 1099-NEC regardless of the amount. If you withheld federal income tax from a contractor's payments under backup withholding, you generally file a 1099-NEC for that contractor even if you paid them less than $2,000.

Zelle is one example of a bank transfer. It moves money directly between bank accounts rather than through a third-party payment network, so payments you send through Zelle generally count toward your 1099-NEC total.

These rules apply to independent contractors, not employees. If you're still deciding how to classify someone, review how to classify employees and independent contractors before you prepare any forms.

How to issue a 1099-NEC in seven steps

1. Total what you paid each contractor in 2026

Pull your 2026 payments by payee. You'll find them fastest in the vendor report in your accounting or payroll software. Leave out amounts you paid by payment card or through a third-party payment network, and generally leave out payments to corporations, except payments for legal services.

Then flag every contractor you paid $2,000 or more. Here's how that works if you paid four contractors in 2026:

2. Make sure you have a W-9 for everyone on your list

Request any missing Form W-9 now. The W-9 gives you the contractor's legal name, address, and taxpayer identification number (TIN), which you need for the 1099-NEC.

If you don't receive a completed Form W-9 or the contractor doesn't provide a TIN, you may still be responsible for filing Form 1099-NEC. You must generally withhold 24% from reportable payments until the contractor provides a valid TIN and deposit the withheld amount with the IRS. IRS Publication 7951 explains how this backup withholding works.

3. Fill out Form 1099-NEC

Each 1099-NEC reports one contractor's payments for the year. The 2026 form (Rev. December 2026) asks for:

• Calendar year: enter 2026 in the "For calendar year" field.
• Payer information: your business name, address, phone number, and taxpayer identification number (TIN), which for most businesses is the employer identification number (EIN).
• Recipient information: your independent contractor's name, address, and TIN, which may be a Social Security number or an EIN, taken from their Form W-9.
• Box 1a, nonemployee compensation: the total you paid the contractor for services in 2026.
• Box 4, federal income tax withheld: any amount you withheld under backup withholding.
• Boxes 5, 6, and 7, state information: state tax withheld, your state identification number, and the state income amount, if your state requires them.

If you paid the contractor cash tips or overtime compensation, the 2026 form has separate boxes for those amounts. The IRS Instructions for Forms 1099-MISC and 1099-NEC explain when to use them.

If you're filing on paper, order official scannable forms from IRS.gov/EmployerForms. A Copy A printed from irs.gov can't be scanned, and the IRS may impose a penalty for filing one, according to the notice on Form 1099-NEC.

4. Choose how you'll file with the IRS

You have three routes:

• The IRIS Taxpayer Portal, a free IRS system that lets you e-file up to 100 returns at a time. You need an IRIS Transmitter Control Code (TCC) to use it, so apply before you plan to file.
• A payroll provider, accountant, tax preparer, or tax software that files for you.
• Paper Copy A with Form 1096, Annual Summary and Transmittal of U.S. Information Returns, which is generally an option if you file fewer than 10 information returns in total for the year, counting any combination of Forms 1099-NEC, W-2, and other information returns. At 10 or more, the IRS generally requires filing electronically, according to the IRS Instructions for Forms 1099-MISC and 1099-NEC.

5. Send Copy B to each contractor

You may furnish Copy B electronically if the contractor affirmatively consents to electronic delivery and you meet the IRS electronic-furnishing requirements in IRS Publication 1099. Otherwise, provide a paper copy.

Ask for that consent when you request the W-9, so you have it on file before January.

6. File with the IRS by Monday, February 1, 2027

The IRS filing deadline and the deadline for sending Copy B fall on the same day. The usual January 31 date falls on a Sunday in 2027. When a due date lands on a weekend or legal holiday, IRS rules move it to the next business day, according to IRS Publication 1099.

7. Check whether your state wants its own filing

Some states require a separate 1099-NEC filing, set their own threshold, or have an earlier deadline. Check your state's revenue or taxation department website for its 1099-NEC rules before you file.

How to correct a 1099-NEC or handle a late filing

If you spot a mistake after filing, file a corrected 1099-NEC with the "CORRECTED" box checked and send the contractor a corrected Copy B. IRS Publication 1099 explains which errors need which fix.

If you missed the deadline, file as soon as you can, because the penalty amount generally increases the later you file. For returns due in 2027, IRS Revenue Procedure 2025-32 sets these per-form amounts, which the IRS may assess depending on when you file:

• $60 if you file within 30 days of the due date
• $130 if you file more than 30 days late but by August 1
• $340 if you file after August 1 or don't file

If the IRS determines you intentionally disregarded the filing requirement, the penalty is generally $690 per form or 10% of the amount that should have been reported, whichever is greater. Separate penalties can apply when a contractor doesn't receive a timely, correct Copy B. A form filed two weeks late generally falls in the $60 tier.

Can I file 1099-NEC forms myself?

Yes. Filing yourself can work well when you have a small number of contractors and your 2026 payment totals are already pulled together. The IRIS Taxpayer Portal is free, and paper filing with Form 1096 is available if you file fewer than 10 information returns.

You can also hand the job to an accountant or tax preparer, or use payroll or tax software, which may make more sense as your contractor list grows.

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