1099-NEC filing is changing for 2026 — here's what business owners need to know

The short version

If you pay contractors, freelancers, or vendors for services, you may owe the IRS a form for each one, and the rules around who qualifies are shifting for 2026. Getting this wrong in either direction is a problem: miss a required filing and you're exposed to penalties; send one to someone who didn't need it and you're creating unnecessary paperwork and contractor confusion.

Why this is easy to get wrong

The reporting threshold depends on which calendar year the payment happened in, the payment method matters (some payment types are reported by the platform instead of you), and certain recipients are exempt regardless of how much you paid them. None of that is obvious just from looking at your books, it requires knowing the current rule, for the current year.

The mistakes we see most

• Not collecting a completed contractor form before the first payment goes out, then scrambling to track someone down months later.
• Filing, or not filing, based on last year's threshold instead of the current one.
• Double-reporting payments that were already covered by a different IRS form because they were paid by card or app.
• Missing the deadline entirely, which carries no automatic extension the way some other filings do.

What's changing for 2026

Federal legislation passed in 2025 raises the dollar threshold for when a 1099-NEC is required, but only for payments made during 2026, not retroactively. If you're not tracking which year's rule applies to which payment, it's easy to file when you didn't need to, or skip a filing you actually owed.