If your business paid a non-employee $600 or more during 2025, you probably need to file a 1099. The rules have exceptions — corporations, credit-card payments, and a new $2,000 threshold starting in 2026. Here is how to tell if you are on the hook.
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Answer yes to all four and you probably need to file a 1099.
For decades, the IRS threshold for 1099 reporting has been $600 per payee per year. If your business paid a contractor, freelancer, attorney, or landlord a total of $600 or more during the tax year, you file a 1099. Under $600, no 1099 required (though the contractor still reports the income on their own return).
The One Big Beautiful Bill Act, signed into law in 2025, raised that threshold to $2,000 for payments made starting January 1, 2026. The change affects tax year 2026 forms, which get filed in early 2027. For tax year 2025 filings due February 2, 2026, the $600 threshold still applies.
Source: IRS Form 1099-NEC instructions and Public Law 119-21 (2025).
Two big categories of payments do not need a 1099 from you, even if they cross the threshold.
C-corps and S-corps are generally exempt. Check the W-9: if the entity marked "C Corporation" or "S Corporation", skip the 1099. Two exceptions always require a 1099 regardless of entity type: attorney fees (1099-NEC) and medical or health care payments (1099-MISC box 6).
Any payment made through a credit card, debit card, or a third-party processor (PayPal, Stripe, Venmo Business, Square) is reported on 1099-K by the processor. Exclude those amounts from your own 1099 filings. Double-reporting the same income confuses the IRS matching system.
If you need to file, the next question is which form. The answer is almost always 1099-NEC for contractors, 1099-MISC for other payment types. They are separate forms with separate deadlines.
| Payment type | Form | IRS deadline (2026) |
|---|---|---|
| Independent contractor / freelancer services | 1099-NEC | Feb 2, 2026 |
| Attorney fees (any entity type) | 1099-NEC | Feb 2, 2026 |
| Rent (to landlord, $600+) | 1099-MISC (box 1) | Mar 2, 2026 (paper) / Mar 31 (e-file) |
| Royalties ($10+) | 1099-MISC (box 2) | Mar 2, 2026 (paper) / Mar 31 (e-file) |
| Medical / health care payments | 1099-MISC (box 6) | Mar 2, 2026 (paper) / Mar 31 (e-file) |
| Gross proceeds to attorneys (settlements) | 1099-MISC (box 10) | Mar 2, 2026 (paper) / Mar 31 (e-file) |
Full breakdown of the 2026 deadlines for each form: 1099 filing deadlines for 2026.
If you are required to file, the hard deadline is February 2, 2026 for tax year 2025 1099-NECs (January 31 falls on a Saturday this year). The penalty for missing it starts at $60 per form and rises to $330 per form after August 1.
The practical steps:
See the 1099 filing reminder overview for how to set the annual reminder, and the penalty schedule for what late filing costs.
For payments made during tax year 2025, a business must file a 1099-NEC or 1099-MISC for any non-employee paid $600 or more during the calendar year. Beginning with payments made in 2026, the One Big Beautiful Bill Act raised the threshold to $2,000 — so tax year 2026 filings will reflect the new limit.
It depends on how the LLC is taxed. Single-member LLCs and partnerships are treated as non-corporate entities — you need to file a 1099 if you paid $600 or more (2025 threshold). LLCs that have elected S-corp or C-corp taxation are generally exempt. Check the W-9 the contractor provided for the tax classification.
Usually no. Payments to C-corporations and S-corporations are generally exempt from 1099 reporting. The main exceptions are attorney fees (always reportable on 1099-NEC regardless of entity type) and medical and health care payments (reportable on 1099-MISC box 6).
No. Payments made through credit card, debit card, or third-party payment networks like PayPal, Venmo Business, or Stripe are reported on 1099-K by the payment processor, not by you. Exclude those amounts from your own 1099 filings to avoid double-reporting the same income.
Use Form 1099-NEC (Nonemployee Compensation) for payments to independent contractors, consultants, and service providers. Use Form 1099-MISC for rents, royalties, prizes, medical and health care payments, and gross proceeds to attorneys. They are separate forms with separate boxes and deadlines.
Yes, if you paid that contractor $600 or more during the calendar year (2025 threshold) and they are not exempt (not a corporation, not paid by credit card). Even a single contractor payment triggers the filing requirement. The threshold rises to $2,000 for payments made in 2026.
Confirmed you need to file? Set a reminder for January 31 and get advance emails every year. Free. Takes 30 seconds.
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