For more than 70 years, the rule was simple: pay a contractor $600 or more and you owe them a 1099. That changed with the One Big Beautiful Bill Act.
What changed
- 1099-NEC and 1099-MISC: The reporting threshold rose from $600 to $2,000 for payments made in 2026. Starting in 2027, it adjusts for inflation each year.
- 1099-K (payment apps and card processors): The threshold went back to $20,000 and more than 200 transactions.
What didn't change
- All income is still taxable. A contractor you paid $1,500 still has to report it, whether or not they get a 1099.
- The deadline. 1099-NECs are normally due January 31. In 2027, January 31 falls on a Sunday, so the deadline moves to Monday, February 1.
- W-9s still matter. You need a correct name and tax ID for anyone you might report. It's much easier to get before you pay them than in late January.
What to do this month
- Pull a vendor report for everyone you've paid in 2026.
- Flag anyone near or over $2,000, especially contractors, freelancers, landlords and attorneys.
- Collect missing W-9s now. Make "W-9 before first payment" a standing rule.
- Check how you paid them. Payments made by credit card or through processors like PayPal are generally reported by the processor on a 1099-K, not by you on a 1099-NEC.
- Don't stop tracking smaller vendors. Your books and deductions still need every payment recorded correctly.
A Kentucky note
Kentucky's Department of Revenue requires 1099 data only when Kentucky tax was withheld. Most small businesses don't withhold on contractors, but check with your preparer if you do.
This post is general information, not tax advice.
Lines & Ledger handles W-9 collection through January filing for small businesses in Bowling Green and across Kentucky. Get your 1099s off your plate.
