The IRS charges a per-form penalty that grows the longer you wait. For tax year 2025, the tiers are $60, $130, $330 — with $660+ per form for intentional disregard and no cap. Here is exactly what you owe, and how to stop owing it next year.
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Source: IRS Information Return Penalties, updated for 2025 and 2026.
| How late | Tax year 2025 | Tax year 2026 | Small-business annual cap (2025) |
|---|---|---|---|
| Filed within 30 days of deadline | $60 per form | $60 per form | $239,000 |
| Filed by August 1 | $130 per form | $130 per form | $683,000 |
| Filed after August 1 or not filed | $330 per form | $340 per form | $1,366,000 |
| Intentional disregard | $660 per form minimum | $680 per form minimum | No cap |
Small-business caps apply to filers with average annual gross receipts of $5 million or less over the prior three tax years.
The numbers above are the penalty for failing to file with the IRS. There is a second, matching penalty for failing to furnish the statement to the recipient. If you miss both — which is typical when a 1099 cycle gets skipped entirely — you owe twice the per-form amount.
A business that skips 1099-NEC for ten contractors and does not file by August 1 is looking at $330 × 10 × 2 = $6,600 in penalties for 2025. That is before interest, and before any state-level penalties layered on top.
Worked example: a small business with 10 contractors, tax year 2025.
Within 30 days. $60 per form × 10 × 2 (IRS + recipient) = $1,200. The cheapest tier, and the most common outcome once someone catches the miss.
Before August 1. $130 per form × 10 × 2 = $2,600. More than double the 30-day tier. Filing before August 1 is the last hard cutoff before the penalty jumps again.
After August 1. $330 per form × 10 × 2 = $6,600. More than five times the cost of catching it early. Intentional disregard pushes this above $13,000 with no cap.
The penalty can be waived if you show reasonable cause — that you exercised ordinary care and prudence but were unable to file on time due to circumstances beyond your control. Typical qualifying causes: serious illness, death in the family, natural disaster, or a documented records destruction. A forgotten date, a busy month, or a contractor who never sent back a W-9 is not reasonable cause.
First-time penalty abatement (FTA) is a separate administrative waiver available if you have filed all required returns and have not been assessed a similar penalty in the prior three years. FTA is a one-shot tool — use it when it will save the most money.
Both require a written request. Neither works as a repeat solution. The only real long-term fix is a reminder system that keeps the deadline from slipping in the first place.
A 1099 reminder that emails you 7 days before January 31, 3 days before, 1 day before, and on the day itself is the cheapest insurance against this penalty. It is free, takes 30 seconds, and repeats every year automatically. The reminder is the gap between a $75 hour of accounting work and a $6,600 penalty bill.
More context on what triggers these penalties and how to prevent them: 1099 filing reminder overview, or what to do if you already missed the deadline.
For tax year 2025, the per-form penalty is $60 if filed within 30 days of the deadline, $130 if filed by August 1, and $330 if filed after August 1 or not at all. Intentional disregard carries a minimum $660 per form with no cap. Tax year 2026 penalties rise slightly to $60 / $130 / $340 / $680.
The penalty is assessed per form. If you are late on ten 1099-NECs, the penalty is ten times the per-form amount. The IRS also doubles the exposure in most cases because you owe one penalty for the failure to file with the IRS and another for the failure to furnish the statement to the recipient.
Yes, except for intentional disregard. For tax year 2025, small businesses (under $5M average gross receipts) have an annual cap of $239,000 at the 30-day tier, $683,000 by August 1, and $1,366,000 after August 1. There is no cap for intentional disregard.
The IRS may waive the penalty for reasonable cause if you can demonstrate you exercised ordinary care and prudence but were unable to file on time. First-time penalty abatement is also available for some taxpayers. Both require a written request and documentation of the circumstances.
Intentional disregard means you knew you were required to file a 1099 and chose not to. It is the highest penalty tier — $660 per form minimum (2025) or 10% of the amount that should have been reported, whichever is greater — with no annual cap. The IRS applies it when a filer knowingly skipped the requirement, not when someone made an honest mistake.
Yes. Penalties are tiered by how late the form is filed. The jump from the $130 tier (by August 1) to the $330 tier (after August 1) is significant — more than 2.5x per form. If you are already late, filing before August 1 typically cuts the bill by more than half.
Set a reminder for January 31 and get advance emails every year. Takes 30 seconds. Free. No account.
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