Source: https://rivet.global/blog/form-1099-nec-2000-threshold
Published: 2026-11-02 · Updated: 2026-11-02 · By William Sunjo M.

# The $2,000 1099-NEC threshold: what US companies file in January 2027

The 1099-NEC and 1099-MISC threshold rises from $600 to $2,000 for payments made in 2026. What US companies file in January 2027 and how foreign contractors fit in.

## Key takeaways

- The One Big Beautiful Bill Act raised the 1099-NEC and 1099-MISC reporting threshold from $600 to $2,000 for payments made after 31 December 2025.
- The threshold is indexed for inflation from 2027 onward.
- Forms for 2026 payments are due to contractors and the IRS by 31 January 2027.
- The same law set the 1099-K threshold back to $20,000 and 200 transactions.
- Foreign contractors working outside the US do not get a 1099. Keep a W-8BEN or W-8BEN-E on file instead.

A US business that pays independent contractors reports those payments to the IRS on Form 1099-NEC. The trigger was $600 a year per contractor for decades. For payments made in 2026 the trigger is $2,000, and January 2027 is the first filing season under the new number.

## What changed

| | Payments made in 2025 | Payments made in 2026 |
|---|---|---|
| 1099-NEC threshold | $600 | $2,000 |
| 1099-MISC threshold (most boxes) | $600 | $2,000 |
| Inflation indexing | No | From 2027 |
| 1099-K threshold | Being phased down | $20,000 and 200 transactions |

The change came in the One Big Beautiful Bill Act, signed in July 2025. Fewer small payments will need a form. A contractor you paid $1,500 in 2026 gets no 1099-NEC from you, although they still owe tax on the income.

## What to file in January 2027

1. Pull every contractor paid in 2026 and total by tax ID.
2. Mark everyone at $2,000 or more.
3. Check you have a W-9 on file for each of them. Ask now, not in late January.
4. File 1099-NEC with the IRS and send copies to contractors by 31 January 2027.

Payments by card or through a payment platform are reported by the platform on a 1099-K, not by you on a 1099-NEC. Leave those out.

## Foreign contractors

This is where most mistakes happen. A foreign person who does the work outside the US is not paid US-source income, and you do not issue a 1099. You do need proof of foreign status:

- **W-8BEN** for an individual contractor.
- **W-8BEN-E** for a foreign company.

The [W-8BEN vs W-8BEN-E guide](/blog/w-8ben-vs-w-8ben-e) explains which to ask for and what each line means. If a foreign contractor travels to the US and does the work there, the income can become US-source. That calls for Form 1042-S and possibly withholding, so speak to a tax adviser before paying.

## Keep payment records that match

Whatever the threshold, keep an invoice, a contract and a payment record for each contractor payment. If a contractor is ever reclassified as an employee, those records are your evidence. Our [guide to paying international contractors](/blog/how-to-pay-international-contractors) covers the paperwork in more detail.

This article explains the rules in general terms. It is not tax advice for your company.

## Paying contractors from Rivet

Rivet pays contractors in more than 120 countries, one at a time or in a batch, and keeps each payment with its reference for year-end. See [Payouts](/payouts).

## Questions

### What is the 1099-NEC threshold for 2026?

$2,000 paid to one contractor during the calendar year. Before 2026 it was $600. The change applies to payments made after 31 December 2025, so the first forms under the new number are filed in January 2027.

### When is the 1099-NEC due?

By 31 January of the year after payment, both to the contractor and to the IRS. If 31 January falls on a weekend, the deadline moves to the next business day.

### Do I issue a 1099 to a foreign contractor?

Not if the contractor is a foreign person and the work was done outside the US. Collect a W-8BEN from an individual or a W-8BEN-E from a company to document foreign status. Work performed inside the US by a foreign person can call for Form 1042-S and withholding instead.

### What happened to the 1099-K threshold?

The 2025 law restored the earlier test: a payment platform files a 1099-K when a payee receives more than $20,000 across more than 200 transactions in the year.