── ── Deadline guide · 2026
The 1099-NEC: who, how much, by when.
Send a 1099-NEC to every unincorporated contractor you paid $600 or more for services during 2025, in the course of your business. The deadline for both the contractor's copy and the IRS filing is January 31 — which falls on a Saturday, so this season it rolls to Monday, February 2, 2026. And the fact most guides haven't caught up with: for payments made in 2026, the threshold rises to $2,000 (IRC §6041(a), as amended) — but that applies to next January's forms, not this one's. Corporations are exempt except attorneys, card and platform payments are the processor's to report, and each missed form runs $680 in stacked penalties.
By Brad Ju, Co-founder, deciqAI · Last updated August 28, 2026
Who actually gets one
Run each payee through this table. The common mistakes live in the exceptions: the incorporated lawyer who still gets one, and the card-paid contractor who doesn't.
| You paid… | 1099-NEC? | Why |
|---|---|---|
| An individual, sole proprietor, partnership, or LLC not taxed as a corporation — $600+ for services (2025 payments) | Yes — 1099-NEC | Nonemployee compensation paid in the course of your trade or business (IRC §6041(a)) |
| The same contractor, but for payments made in 2026 | Yes — if $2,000+ | The threshold rises to $2,000 for payments after December 31, 2025, indexed for inflation after 2026 (IRC §6041(a), as amended by the 2025 reconciliation act §70433) |
| A corporation (Inc., or an LLC taxed as a C/S-corp) | Generally no | Corporate payees are exempt — with the attorney exception below |
| A lawyer or law firm — fees for legal services | Yes — 1099-NEC, even if incorporated | Attorneys' fees are carved out of the corporate exemption; gross proceeds (settlements) go on 1099-MISC instead |
| A contractor, but by credit card, debit card, or a payment platform's business network | No — not by you | Card and third-party-network payments are reported by the processor on Form 1099-K, not by the payer |
| A vendor for goods, materials, or merchandise only | No | The form covers services, not purchases of goods |
| Someone for personal (non-business) work — a nanny, your own home repairs | No 1099-NEC | Only payments in the course of a trade or business are reportable (household employees have their own rules) |
| An employee | No — W-2 | Employee wages belong on Form W-2; worker classification is its own question with its own stakes |
The deadline, precisely
| What | When | Detail |
|---|---|---|
| Copy to the contractor (payee copy) | January 31 | For 2025 payments: January 31, 2026 falls on a Saturday, so the deadline rolls to Monday, February 2, 2026 (IRC §7503) |
| Filing with the IRS — paper or electronic | Same January 31 date | The 1099-NEC has no staggered e-file date: both the payee copy and the IRS filing share the same deadline |
| Extension? | Not automatic | Form 8809 extensions for the 1099-NEC are granted only under specific hardship criteria — plan as if the date is hard |
| E-filing requirement | 10+ information returns | If you file 10 or more information returns in aggregate for the year, electronic filing is mandatory (T.D. 9972); the IRS's free IRIS portal handles it |
The working deadline is earlier than the legal one: a 1099-NEC needs the contractor's W-9 on file, and collecting W-9s is its own chase — budget roughly 45 days of lead time, which puts the real start in mid-December.
The situations that actually come up
"I paid a contractor $1,500 during 2026 — do I still file?"
Our pick: No federal 1099-NEC — but the income is still taxable
For payments made in 2026, the reporting threshold is $2,000, so a $1,500 contractor generates no federal 1099-NEC requirement when forms go out in January 2027. Two cautions. First, the January 2026 filing season reports 2025 payments, and those still use the $600 threshold — don't apply the new number a year early. Second, the threshold changes who files a form, not what's taxable: your contractor owes tax on that $1,500 regardless, and your books still need to support the deduction.
"My contractor won't give me a W-9"
Our pick: Backup withholding — and start the chase before you pay
Without a TIN you can't file a correct 1099-NEC, and the rules don't let you shrug: payments to a payee who fails to furnish a TIN are subject to backup withholding at 24% (IRC §3406). The practical discipline is sequencing — collect the W-9 before the first payment, when you still have leverage, rather than in January when the deadline is weeks away and the contractor has stopped answering. Collecting W-9s is itself a document-chase round; budget lead time for it.
"I paid everyone through PayPal and cards — do I file anything?"
Our pick: Generally no — the processor reports on 1099-K
Payments settled by credit card, debit card, or a third-party network's business accounts are excluded from 1099-NEC reporting: the processor reports them on Form 1099-K instead. For 2025, the 1099-K threshold is back to $20,000 and 200 transactions (IRC §6050W, as restored by the 2025 reconciliation act). The trap is mixed payment methods — the contractor you paid $3,000 by ACH bank transfer and $5,000 by card gets a 1099-NEC for the $3,000 side only. Your ledger has to split those rails.
"January 31 passed and I filed nothing"
Our pick: File now — the exposure is $680 per form and tiered by delay
A missed 1099-NEC carries two stacked penalties: $340 per form for the late IRS filing (IRC §6721, at the top tier for forms not filed by August 1) plus $340 for the unfurnished payee copy (IRC §6722) — $680 per form. If the payee copy went out on time, only the §6721 half applies. The statute tiers downward for filings corrected quickly, so filing in February costs materially less than filing in September — which makes 'file now' the whole strategy. Ten missed contractors is $6,800 of exposure; this is not a form to let drift.
"1099-NEC or 1099-MISC — which one?"
Our pick: NEC for services by nonemployees; MISC for the leftovers
Since the 1099-NEC's return in 2020, the split is clean: compensation for services performed by a nonemployee goes on the NEC, box 1. The 1099-MISC keeps the rest — rents, prizes and awards, other income, and gross proceeds paid to attorneys (settlement money, as opposed to the attorney's own fees, which are NEC). If you're paying a person to do work and they're not your employee, it's the NEC.
"I run a firm — this is January across forty clients"
Our pick: Derive the list from the books, not from memory
The failure mode at firm scale isn't misunderstanding the rules — it's the client whose ledger shows six vendors over the threshold and whose file shows two W-9s, discovered on January 25. The work is deterministic: which vendors crossed the threshold, on which payment rails, with which W-9s on file, at $680 of exposure per miss. That derivation belongs to software reading the ledger, with the lead time budgeted for the W-9 chase — the judgment calls (worker classification, the odd attorney settlement) belong to the professional.
Three ways to get it done
IRS IRIS — the free e-file portal
Best for: Any payer who has the list of contractors and amounts ready
The IRS's Information Returns Intake System e-files 1099s directly, free, with no software purchase — and it satisfies the 10-return electronic filing mandate. If you have each contractor's W-9, the amounts, and a spare hour, this is the correct default for a small payer.
Main limitation: IRIS types and transmits the forms; it does not tell you who needs one. The determination — which vendors crossed the threshold, on which payment rails, services vs goods — happens in your books before you ever log in.
deciqAIOur product
Best for: Deriving the 1099 list from the ledger — across one business or a client book
The determination is where 1099 season actually goes wrong, and it's ledger work: deciqAI reads the books and flags which vendors crossed the reporting threshold for the correct payment year — $600 for 2025 payments, $2,000 for 2026 — net of card-rail payments that belong on the processor's 1099-K, tracks the January 31 deadline with lead time budgeted for the W-9 chase, and computes the exposure on each missing form ($680, with the statute citation attached) so the January priority list orders itself. Anything the books can't support is flagged rather than filled in. Disclosure: this is our product — we're not neutral, weigh accordingly.
Main limitation: It doesn't e-file the forms — the filing itself runs through IRIS or your filing software — and it deliberately doesn't make worker-classification calls: whether someone is a contractor at all is a judgment with stakes beyond this form, and it belongs to you and your professional.
Your payroll or accounting software's 1099 module
Best for: Payers already running AP through one system all year
Most payroll and accounting platforms bundle a January 1099 workflow that pre-fills from the vendor records you maintained all year. When the underlying records are clean — W-9s attached, payment rails recorded — these are genuinely convenient.
Main limitation: The module inherits your ledger's hygiene. Vendors paid outside the system, missing W-9s, and card-vs-ACH splits surface in January as exceptions, which is the part that was hard to begin with.
FAQ
Who has to receive a 1099-NEC?
Any individual, sole proprietor, partnership, or LLC not taxed as a corporation that you paid $600 or more for services during 2025, in the course of your trade or business. Corporations are exempt — except attorneys, whose fees are reportable regardless of incorporation. Payments made by credit card or through a third-party payment network are excluded (the processor reports those on Form 1099-K), and purchases of goods don't count. For payments made in 2026, the threshold rises to $2,000.
What is the 1099-NEC deadline for 2026?
January 31 — for both the contractor's copy and the IRS filing, paper or electronic. Because January 31, 2026 falls on a Saturday, the deadline for reporting 2025 payments rolls to Monday, February 2, 2026 under IRC §7503. There is no automatic extension: Form 8809 relief for the 1099-NEC is granted only under specific hardship criteria.
Did the 1099-NEC threshold change?
Yes — but not for the forms due in early 2026. The 2025 reconciliation act (§70433) amended IRC §6041(a) to raise the reporting threshold from $600 to $2,000 for payments made after December 31, 2025, with inflation indexing after 2026. So: 2025 payments, reported January 2026, still use $600; 2026 payments, reported January 2027, use $2,000. Applying the new threshold a year early is the mistake to avoid this season.
What is the penalty for not filing a 1099-NEC?
Two penalties stack: $340 per form for a late IRS filing at the top tier — forms not filed by August 1 (IRC §6721) — plus $340 per form for failing to furnish the payee copy (IRC §6722), or $680 per form as currently inflation-adjusted. If the payee copy went out on time, only the §6721 half applies, and both statutes tier downward for filings corrected quickly. Intentional disregard removes the caps entirely.
Do I have to e-file 1099-NECs?
If you file 10 or more information returns in aggregate during the year — counting W-2s, all 1099 varieties, and the rest together — electronic filing is mandatory under the final regulations (T.D. 9972). The IRS's IRIS portal e-files 1099s free, so the mandate is not a software purchase in disguise.
Does my contractor owe tax on income below the threshold?
Yes. The reporting threshold decides whether you must file a form, not whether the income is taxable — a contractor paid $1,900 in 2026 receives no 1099-NEC but owes tax on every dollar. Educational content, not tax advice: the numbers on this page are the general federal rules, and edge cases — worker classification above all — belong with a licensed professional.
General information, not tax advice. Figures are the federal rules as of the date above, with penalty amounts as currently inflation-adjusted (Rev. Proc. 2025-32); state information-return requirements vary and worker-classification questions belong with a licensed professional.
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