Paying freelancers in 2026? The 1099 reporting threshold changed from $600 to $2,000.

Key takeaways:

• The 1099-NEC and certain 1099-MISC threshold rose from $600 to $2,000 for payments after December 31, 2025.
• Backup withholding triggers a filing even below the threshold.
• Royalties remain reportable at $10 or more.
• The test is the total paid to the same recipient in the calendar year.

1. The quick answer

Quick answer: The reporting threshold for Form 1099-NEC (nonemployee compensation) and several 1099-MISC categories rose from $600 to $2,000 for payments made after December 31, 2025, so it first applies to 2026 payments. If you pay a freelancer, designer, or contractor $2,000 or more in a year for services, you generally file a 1099-NEC.

2. Exceptions to remember

Per the NATP summary: a 1099-NEC or 1099-MISC generally must be filed for a payment from which backup withholding was taken, even if below the threshold (the backup withholding rate is generally 24%). Royalties remain reportable at $10 or more. Attorney gross proceeds of $600 or more are reported in Box 10 of Form 1099-MISC. For categories under the new threshold, the test is the total paid to the same recipient during the calendar year.

3. A solo founder’s contractor routine

Treating someone as a contractor also raises a classification question; see independent contractor vs. employee and how to write a freelance contract. If you use AI tools or AI-assisted freelancers, add IP terms: confidentiality and IP assignment.

4. Caveat

The summary does not say whether or when the threshold will be indexed for inflation. Confirm current instructions on IRS.gov or with your accountant before you file.

Where DoubleCheck fits

DoubleCheck is built for businesses that start legal work with AI. Bring your question or draft, use an AI-first workflow to understand and verify it, and when professional advice is warranted, you can connect with an independent attorney. Attorneys on DoubleCheck are independent professionals; an attorney-client relationship forms only if an attorney accepts your engagement.

Sources: NATP: Form 1099 filing changes under the new $2,000 threshold.

FAQ

What is the 1099-NEC threshold for 2026?

$2,000 for payments made after December 31, 2025, up from $600, per NATP’s summary.

Do I file a 1099 if I withheld backup tax?

Generally yes, even if the payment is below the threshold.

Does the $2,000 apply to royalties?

No. Royalties remain reportable at $10 or more.

Is the new threshold indexed for inflation?

The summary does not say. Check current IRS instructions.

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General information only. This article is not legal, tax, investment, or accounting advice.