Do I need to send a 1099-NEC?

Do I have to send a 1099-NEC to a contractor I paid?

Threshold: yes, if your business paid a non-employee $2,000 or more for services in 2026 ($600 for 2025 payments). Source: IRS Instructions for Forms 1099-MISC and 1099-NEC.
Who's exempt: payments to most corporations (including LLCs taxed as C or S corporations), payments for merchandise, freight or storage, and payments made by card or payment app (those go on Form 1099-K). Source: the same IRS instructions.
Deadline: file with the IRS by January 31; 2026 forms are due Monday, February 1, 2027, because January 31, 2027 is a Sunday.

Yes, if your business paid that person $2,000 or more during 2026 for services and they aren't your employee. The current IRS instructions for Forms 1099-MISC and 1099-NEC say to file Form 1099-NEC for each person you paid at least $2,000 for services by a non-employee (including parts and materials), because for tax years beginning after 2025 the threshold rose to $2,000. It may be adjusted for inflation beginning in 2027. For payments made in 2025 it was $600. File it with the IRS by January 31; the IRS moves the date to the next business day when it falls on a weekend or holiday, and January 31, 2027 is a Sunday, so 2026 forms are due Monday, February 1, 2027.

Three common exceptions: payments to a corporation (including an LLC taxed as a C or S corporation) generally don't need one; payments for merchandise, freight or storage don't; and payments you made by card or through a payment app aren't reported on a 1099-NEC, because the payment company reports them on Form 1099-K.

Last verified November 4, 2026 against IRS Instructions for Forms 1099-MISC and 1099-NEC, IRS Instructions for Forms 1099-MISC and 1099-NEC (Rev. April 2025), IRS About Form W-9. Fee change tracker · How we verify

The checklist

Question	If yes
Was the payment made in the course of your trade or business?	Keep going. Personal payments (your own house cleaner, say) aren't covered by these business rules.
Was it for services by someone who is not your employee?	Keep going. Employee pay goes on Form W-2 instead.
Was the payee an individual, partnership or estate (not a C or S corporation)?	Keep going. Corporations are generally excluded, with exceptions such as attorneys.
Did you pay by cash, check or direct bank transfer?	Keep going. Card and payment-app payments go on Form 1099-K, filed by the payment company.
Did the total for that person reach $2,000 in 2026?	File Form 1099-NEC with the IRS by January 31 and give the contractor their copy.

Example: a cleaning or lawn care business at year end

Payee	Paid by	2026 total	1099-NEC?	Why
Sam, sole-proprietor window cleaner	Check	$2,400	Yes	Paid for services, not an employee, $2,000+ in the year
Lee, helper paid by bank transfer	Zelle / direct bank transfer	$1,800	No	Under $2,000 for the year
Ace Lawn Inc. (S corporation)	Check	$6,000	Generally no	Payments to a corporation are generally excluded
Pat, subcontractor paid by card	Business credit card	$3,500	No	Card payments are reported on Form 1099-K by the payment settlement entity
Supply store	Debit card	$9,000	No	Merchandise is excluded (and it was a card payment)

Illustrative names and amounts. Whether a worker is an employee or an independent contractor depends on the facts; the IRS points to Publication 15-A for that question. Zelle and similar bank-to-bank transfers aren't card payments; if you are unsure how a payment app classifies a payment, ask a tax professional.

Before you pay anyone: get a W-9

The IRS says the purpose of Form W-9 is for a payee to give their correct taxpayer identification number to the person who has to file an information return. Asking for it before the first payment saves a scramble in January; see what a W-9 is and who fills it out. Keep it with your records (see how long to keep business records).

If you're the one getting paid

A client sends you a 1099-NEC when they pay you $2,000+ by cash, check or bank transfer; if they paid you by card or through PayPal, Venmo or Stripe, that money may show up on a Form 1099-K instead. Either way, the IRS says you must report all your income, with or without a form. Payments reportable in box 1a are generally subject to self-employment tax; see how to calculate self-employment tax.

Questions

What is the 1099-NEC threshold for 2026?

$2,000. The IRS instructions say that for tax years beginning after 2025, the minimum reporting threshold rose to $2,000, and it may be adjusted for inflation beginning in 2027.

Is the 1099-NEC threshold still $600?

Not for payments made in 2026. $600 was the threshold in the April 2025 instructions, which apply to payments made in 2025 (forms filed in early 2026).

When is Form 1099-NEC due?

The IRS says to file Form 1099-NEC on or before January 31, on paper or electronically. If that date falls on a weekend or legal holiday, the due date is the next business day. January 31, 2027 is a Sunday, so forms for 2026 payments are due February 1, 2027.

Do I send a 1099-NEC if I paid a contractor through PayPal or by credit card?

No. The IRS instructions say card payments and third-party network transactions are reported on Form 1099-K by the payment settlement entity, and are not subject to reporting on Form 1099-NEC or 1099-MISC.

Do I send a 1099-NEC to an LLC?

It depends on how the LLC is taxed. The IRS excludes payments to a corporation, including an LLC treated as a C or S corporation. A single-member or partnership LLC that isn't taxed as a corporation is not covered by that exclusion. A W-9 tells you how the payee is classified.

Do I need a 1099-NEC for materials I bought?

No. Payments for merchandise, freight, storage and similar items are excluded. If a contractor supplies parts and materials as part of a service, the IRS includes them in the service payment.

Is this tax advice?

No. It summarizes the IRS instructions. Your situation may differ; ask a tax professional before relying on it.

General information, not tax, legal or accounting advice. Rates change: check the linked official source before you rely on a number. Not yet reviewed by a CPA or EA.