Do you need to send a 1099?
Send a 1099-NEC to any unincorporated contractor you paid $2,000 or more for services in 2026, up from $600 for payments in 2025. You usually don't send one to a corporation or for card payments. It's due to the contractor and the IRS by January 31, or the next business day.
Updated November 2026 · By Pankil Kumar, Managing Partner
Quick facts
- Threshold. $2,000 for payments in 2026, $600 for payments in 2025
- Due. To the contractor and the IRS, next business day if a weekend
- Skip it for. Corporations and card or payment app payments
Who gets a 1099-NEC?
You send one when all of these are true. You paid for services, it was for your business, the person isn't your employee, and the total reached the threshold during the year. That covers freelancers, independent contractors, sole proprietors and most LLCs taxed as sole proprietorships or partnerships.
Paying for personal things, like a home renovation, doesn't count. Neither does buying goods.
Who doesn't get one?
- Corporations and LLCs taxed as S-Corps or C-Corps, with exceptions for attorneys and medical payments
- Anyone you paid by credit card or through a payment app, because the processor reports it on Form 1099-K
- Employees, who get a W-2
| Payment | 2026 rule |
|---|---|
| $1,500 to a freelancer by check | No 1099 required |
| $2,500 to a sole proprietor by ACH | Send a 1099-NEC |
| $5,000 to an LLC taxed as an S-Corp | Usually none |
| $3,000 paid by credit card | None, reported on 1099-K |
Why should you get a W-9 first?
A W-9 gives you their legal name, tax ID and tax classification, which tells you whether a 1099 is needed. Collect it before you pay. If someone won't provide a tax ID, you may have to withhold backup tax on the payment. Chasing W-9s in January is a miserable way to start a year.
How do you file?
Most small businesses e-file, using a service or the IRS's free IRIS portal. If you've got 10 or more information returns in total, e-filing is generally required. Late filing brings a penalty per form that rises over time, so a late form is far better than none.
For the full detail, including rent and other payments on 1099-MISC, see our 1099 rules guide.
Sources
- IRS: Instructions for Forms 1099-MISC and 1099-NEC
- IRS: E-file information returns with IRIS
- IRS: About Form W-9
General information, not tax advice for your situation.
Do I send a 1099 to an LLC?
Usually yes, unless it's taxed as an S-Corp or C-Corp. The W-9 tells you which.
What if my contractor refuses to give me a W-9?
You may need to withhold backup tax from the payments and send it to the IRS. Ask for the W-9 before you pay.
What is the penalty for not filing a 1099?
The IRS charges a per-form penalty that grows the later you file, and it's higher for intentional disregard.
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