2026 Form 1099 Reporting: New Thresholds, Familiar Year-End Preparations

There’s good news for businesses heading into 1099 season. The reporting threshold for many payments reported on Forms 1099-NEC and 1099-MISC increased from $600 to $2,000 for certain boxes (as indicated below) for 2026, which may mean fewer forms to prepare and file. Even with fewer forms, thoughtful preparation pays off. A year-end review gives finance teams an opportunity to resolve missing W-9s, clean up vendor records, and confirm payment information before January arrives. Getting those details in order now can make the reporting process considerably easier.

What Changed for 2026

The new $2,000 threshold applies to several common types of reportable payments. On Form 1099-MISC, these include rents, prizes and awards, nonqualified deferred compensation, and other income payments, among others. For Form 1099-NEC, aggregate annual payments of $2,000 or more for services performed by someone who is not your employee are generally reportable.

Not every reporting threshold increased to $2,000. Royalties generally remain reportable at $10 or more, while gross proceeds paid to an attorney remain subject to a $600 threshold. Payments must also be reported when federal income tax has been withheld under the backup withholding rules, regardless of the payment amount.

Payment method matters, as well. Payments made by credit card or payment card and certain third-party network transactions are reported by the payment settlement entity on Form 1099-K and are not reported by the business on Form 1099-MISC or Form 1099-NEC.

The below table summarizes the threshold changes for 2026:

Get Your Records Ready Before Year-End

Good 1099 preparation begins well before the forms are due. Businesses should collect and store Form W-9 when onboarding new vendors rather than trying to obtain missing information during filing season. Keeping W-9s within your ERP system or electronic bill-pay software also makes the information easier to retrieve when year-end reporting begins. To make this process even smoother, AAFCPAs recommends analyzing your vendors for missing W-9s as a regular part of your month-end close checklist.

Before year-end, review your vendor master for missing or outdated W-9s, verify Taxpayer Identification Numbers, confirm entity classifications, and identify inactive or duplicate vendors that can be archived. Additionally, when looking at a vendor’s W-9, keep in mind that C Corporations are usually exempt, meaning you do not need to issue a 1099. However, there is a major exception to this rule: you must always send a 1099 to law firms and medical clinics, even if they are registered as C Corporations. Review payment activity and payment methods at the same time so you can identify transactions that may require reporting and distinguish payments reported separately by payment processors.

Addressing those details now gives your finance team time to resolve discrepancies before January, when 1099 preparation often competes with the closing of books and other year-end responsibilities.

2026 1099 deadlines

Putting This Into Practice: Tax Planning

AAFCPAs’ Outsourced Accounting & Fractional CFO practice can take much of the year-end 1099 workload off your finance team’s plate. Our advisors perform a comprehensive 1099 analysis to determine filing requirements, review vendor information and payment activity, and prepare and file required Forms 1099 on your behalf. This added capacity can be especially valuable during year-end, when reporting competes with other demands on your finance team. Our support also extends beyond filing season. AAFCPAs works with organizations to improve accounting processes that feed year-end reporting, from vendor onboarding and recordkeeping to the systems and workflows that keep financial information organized throughout the year.

These insights were contributed by Destiny J. Flood, CPA, Partner, Commercial Outsourced Accounting & Fractional CFO and Nicholas M. Foresti, MBA, Consulting Controller.

Questions? Reach out to our authors directly or your AAFCPAs partner.

AAFCPAs offers a wealth of resources on strategic tax planning. Subscribe to get alerts and insights in your inbox.