Information returns: 1099-NEC and 1099-MISC
The January information returns: who gets a 1099-NEC at $2,000 for 2026, and the 2027 dates, weekend moves included.
An information return reports a payment rather than computing a tax. The IRS gets a copy, the person paid gets a copy, and the IRS matches one against the other's return. For a startup the common ones each January are Form 1099-NEC for contractors and Form 1099-MISC for rents, prizes and some other payments. Collecting each payee's Form W-9 and deciding who gets a form is the AP track's work; this lesson is the filing calendar.
For payments made in 2026, a 1099-NEC is required for nonemployee compensation of $2,000 or more in the year, up from $600 for 2025, and the IRS may adjust it for inflation from 2027. Card and payment-platform payments are reported by the processor on Form 1099-K instead.
Paper
- Good at
No e-file account to set up.
- Watch for
Due Mar 1, 2027, a month earlier.
- Best for
- A handful of forms, where the IRS allows paper.
Electronic
- Good at
- Due Mar 31, 2027.
- Through the Combined Federal/State Filing Program, can also reach participating states.
- Watch for
Needs an IRS e-file account or a provider.
- Best for
- Most companies.
Wrong
Ask contractors for their details in January.
Right
Collect a W-9 before the first payment; tag every payment to its payee all year; file from the books in January.
A missing or wrong TIN is what turns a 1099 into backup withholding. The W-9 comes before the first payment, not in January.
1099-NECs go to the contractor and the IRS by January 31 — moved to the next business day when it falls on a weekend.
Where this lesson's rules come from
The sources behind this lesson's requirements, by kind. Anything marked as a convention is ours, not the rule-maker's.
- Federal statute
- 26 U.S.C. §7503 (opens in a new tab)Time for performance of acts where last day falls on Saturday, Sunday, or legal holidayFree to read
- IRS guidance
- Instructions for Forms 1099-MISC and 1099-NEC (Rev. 12/2026) (opens in a new tab)Due dates, the $2,000 threshold for payments after 2025, and who gets a formFree 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.
- Information returnA return that reports a payment to the IRS and to the person paid, rather than computing a tax — Form 1099-NEC, 1099-MISC, 1099-K, W-2, 3921. Due dates are per form, and §7503 moves a weekend date to the next business day
- 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-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 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
- 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.
- TaxFormTrackerVendors over the reporting threshold, with W-9 and TIN-match state.
- TaxIdInputEIN, SSN, VAT and GST numbers with per-scheme format checks, masked at rest.