Starting with payments made in 2026, the reporting threshold for Forms 1099-NEC and 1099-MISC rises from $600 to $2,000 and will be indexed for inflation from 2027. The Form 1099-K threshold for payment apps and marketplaces is restored to $20,000 and more than 200 transactions.
The July 2025 federal tax law changed two information reporting thresholds that affect almost every small business and side business.
Forms 1099-NEC and 1099-MISC: for payments made in 2026 and later, the threshold for reporting payments to contractors and other non employees rises from $600 to $2,000, with inflation indexing beginning in 2027. Businesses should still collect a Form W-9 from every vendor, because the threshold is measured per payee per year and can be crossed late in the year.
Form 1099-K: the threshold for third party settlement organizations such as payment apps and online marketplaces is restored to gross payments over $20,000 and more than 200 transactions, retroactively, replacing the $600 threshold that had been scheduled to phase in.
A caution that applies to both: a reporting threshold is not an income threshold. Income is taxable whether or not a form arrives, and the IRS matches what it does receive. Keep records of business receipts regardless of the paperwork, and separate personal transfers from business payments on the same app.
Information here is general and is not advice for your situation. For advice about your situation, contact us.
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