Big Changes to the 1099 Filing Rules

The recently passed 2025 Tax and Budget Reconciliation Act dramatically increased the thresholds for issuing certain 1099 forms. Starting in 2026, businesses will only need to file Form 1099-NEC for independent contractors when the total annual payments exceed $2,000, up from the long-standing $600 threshold. Beginning in 2027, the amount will be adjusted annually for inflation in $100 increments, resulting in fewer filing obligations for many small businesses.

The Act also rolled back planned changes to Form 1099-K, which is issued by third-party payment platforms like PayPal, Uber, and eBay. Instead of lowering the threshold to $600, the rules revert to the pre-2023 standard: a 1099-K is only issued if payments exceed $20,000 and involve more than 200 transactions in a year. This change applies retroactively to 2022, easing the compliance burden for both platforms and taxpayers.

Remember: Even if you don't receive a 1099 form, you're still required to report all taxable income on your return.