1099-NEC and 1099-MISC at year end
Who gets a 1099-NEC or 1099-MISC for 2026 payments, the new $2,000 threshold, the deadlines, Form 1096 and IRIS, on Northwind's vendor list.
Each January a business reports what it paid non-employees the year before. Services go on Form 1099-NEC; rent and a list of other payments go on Form 1099-MISC. Who gets one turns on four things: what was paid for, who was paid, how much, and how. The "how much" changed for 2026.
The One Big Beautiful Bill Act raised the threshold in IRC §6041 from $600 to $2,000 for payments made after December 31, 2025, and indexes it for calendar years after 2026. So Northwind's first 1099s, for 2026, use $2,000.
Who gets one is a short decision tree: services or rent, to someone who is not a corporation (a law firm counts whatever its form), $2,000 or more in the year, paid by check, ACH, wire or cash. Card and payment-network payments are reported by the processor on Form 1099-K, and a vendor you backup-withheld from gets a form at any amount.
For 2026 payments: $2,000 or more, for services or rent, to a non-corporation (or to any law firm), paid other than by card, gets a 1099 by February 1, 2027.
In this lesson: who gets a 1099, decided vendor by vendor on Northwind's list, with an exercise; and filing them, with the deadlines, Form 1096 and IRIS.
Pages in this lesson
2 pages go deeper, about 13 minutes in all. Read them in order, or open the one you need.
Where this lesson's rules come from
The sources behind this lesson's requirements, by kind. Background reading explains; it is never the authority for a rule. Anything marked as a convention is ours, not the rule-maker's.
- Federal statute
- IRC §6041(a), (h), as amended by Pub. L. 119-21, §70433 (opens in a new tab)Information at source: the $2,000 threshold, indexed for calendar years after 2026Free to read
- IRS guidance
- Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026), Form 1099-NEC, box 1a (opens in a new tab)The 1099-NEC threshold for 2026 paymentsFree to read
- Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026), Form 1099-MISC, box 1 (opens in a new tab)Rent goes on Form 1099-MISCFree to read
- Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026), Payments to corporations (opens in a new tab)Corporations are generally exempt; law firms are notFree to read
- Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026), Payments not reported (opens in a new tab)Goods are not reported on a 1099Free to read
- Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026), Form 1099-K (opens in a new tab)Card and payment-network payments are reported on Form 1099-K, not the NEC or MISCFree to read
- Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026), Due dates (opens in a new tab)Form 1099-NEC is due January 31Free to read
- Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026), Due dates (opens in a new tab)Form 1099-MISC runs on a later IRS deadlineFree to read
- Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026), Electronic filing; T.D. 9972 (opens in a new tab)Ten or more information returns must be filed electronicallyFree to read
- IRS Pub. 1099 (2026), General Instructions for Certain Information Returns — due dates (opens in a new tab)A due date on a weekend or legal holiday moves to the next business dayFree to read
- IRS — About Form 1096 (opens in a new tab)Form 1096 is for paper filings onlyFree to read
- IRS — E-file information returns with IRIS (opens in a new tab)IRIS, the Information Returns Intake SystemFree to read
- Official form
- Form 1099-NEC (Rev. December 2026) (opens in a new tab)Form 1099-NEC, Nonemployee CompensationPDF · Free to read
- Form 1099-MISC (opens in a new tab)Form 1099-MISC, Miscellaneous InformationPDF · Free to read
- Form 1096 (2026), Purpose of form (opens in a new tab)Form 1096, Annual Summary and Transmittal of U.S. Information ReturnsPDF · Free to read
- Background reading — not an authority
- Wikipedia, “Form 1099” (opens in a new tab)Form 1099Free to read
The words this lesson teaches
Each links to its glossary definition, which also names the authority behind it and the components that render it.
- Form 1099-NECThe IRS information return for nonemployee compensation paid to a contractor in the course of business — required at $600 a year for payments through 2025 and $2,000 from 2026 (indexed from 2027), due to the recipient and the IRS by January 31
- Form 1099-MISCThe IRS information return for rents, prizes and other listed payments made in the course of a business — $2,000 or more for payments made in 2026, $600 through 2025. Services go on Form 1099-NEC instead
- Form 1099-KThe information return from a payment settlement entity reporting a payee's gross payment card and third-party network receipts — card transactions at any amount; third-party network transactions only above $20,000 and 200 transactions, the threshold the OBBBA retroactively reinstated. Gross of refunds, chargebacks and fees, so it never ties to revenue
- Form 1096The transmittal that summarizes paper Forms 1099 (and certain others) sent to the IRS. Not used when filing electronically
- IRISThe IRS's system for filing Forms 1099 electronically, including a free web portal that needs an IRIS Transmitter Control Code. Electronic filing is required once a filer has 10 or more information returns in a year
- Form W-9The IRS form a US payee gives a payer to certify its name, tax classification and taxpayer identification number — collected before the first payment, because it drives 1099 reporting and backup withholding
- Backup withholdingFederal income tax a payer must withhold at 24% from reportable payments — contractor fees, interest, dividends, card settlements — when the payee has not given a correct TIN or the IRS has notified the payer to withhold. Deposited and reported on Form 945
- Combined Federal/State Filing ProgramThe IRS program that forwards 1099s filed electronically to participating states, satisfying their filing requirement — though many states still require direct filing, or a reconciliation return of their own
In the founder glossary
This lesson’s ideas, explained for the founder running the company. Each has an entry in the founder glossary.
See also
- Procure to pay (AP)The payables stack from requisition to reconciliation: requisition → PO → receipt → bill → approval → payment → reconciliation.
- Form 1099-NEC for startups: threshold, deadline, e-filingWho gets a 1099-NEC, the new $2,000 threshold, why a W-9 comes first, what goes on a 1099-K instead, and the deadlines, penalties and state copies.
- W-9s and backup withholding: a vendor onboarding guideWhen to ask for a W-9, how IRS TIN matching works, and what happens when a vendor won’t give you one: 24% backup withholding, owed by you.
- Startup tax deadlines by month for a C-corpFederal tax deadlines for a calendar-year C-corp, month by month: W-2s, 1099s, Form 941, Form 1120, estimated taxes and Delaware franchise tax.
- TaxFormTrackerVendors over the reporting threshold, with W-9 and TIN-match state.
- VendorMasterBank details versioned, never overwritten.