How to fill out Form 1099-NEC (2026): box by box, $2,000 threshold

Tax forms › Form 1099-NEC · Last reviewed October 25, 2026 · General information, not tax advice

Form 1099-NEC at a glance

What it reports	Payments for services to people who are not your employees
Threshold for 2026	$2,000 or more in the year (was $600)
Due for 2026	Mon, Feb 1, 2027, to the contractor and to the IRS
File with	IRS, through IRIS or on official paper forms with Form 1096
E-file required	When you file 10 or more information returns in total

What Form 1099-NEC is

Form 1099-NEC reports nonemployee compensation: what you paid in the course of your business to a contractor, freelancer or other non-employee for services. The contractor reports it as self-employment income.

The One Big Beautiful Bill Act raised the reporting threshold from $600 to $2,000 for payments made after December 31, 2025, and the IRS says it may be indexed for inflation from 2027. The 2026 form also splits box 1 into 1a (nonemployee compensation), 1b (cash tips), 1c (tipped occupation code) and 1d (overtime compensation).

Who has to file

You file for each person you paid $2,000 or more in 2026 for services in your trade or business: individuals, partnerships, LLCs taxed as partnerships or sole proprietorships, and estates.
Payments to corporations, including LLCs taxed as C or S corporations, generally do not need a 1099-NEC. Attorney fees are the exception: report them regardless of how the firm is organized.
Payments by credit card, debit card or a payment app are reported by the processor on Form 1099-K, not by you.
Personal payments, such as a plumber at your home, are not reportable.

Due dates

What	Due
Copy B to the contractor	Mon, Feb 1, 2027 (Jan 31 is a Sunday)
Copy A to the IRS, paper or electronic	Mon, Feb 1, 2027

There is no automatic extension for the 1099-NEC. A 30-day extension on Form 8809 is granted only for specific hardships.

Penalties for filing late or wrong

For returns due after December 31, 2026, per form: $60 if filed correctly within 30 days; $130 if filed by August 1; $340 after August 1 or not filed. Small businesses have lower annual maximums.
Intentional disregard: at least $690 per form, with no maximum.
The penalties apply separately to the IRS copy and the contractor's copy.
Not collecting a TIN: you must start backup withholding at 24% on reportable payments, and you are liable for it if you do not.

Form 1099-NEC box by box

Box	What goes there	Where it comes from in your books
Payer	Your name, address, phone number and TIN (EIN, or SSN for a sole proprietor without one)	Company settings
Recipient	The contractor's TIN, name and address, exactly as on their W-9	The vendor record, from the W-9
Account number	Required if you file more than one 1099-NEC for the same person, or if the 2nd TIN notice box is ticked	Your vendor number
2nd TIN not.	Tick if the IRS has told you twice in 3 years that the TIN is wrong	IRS CP2100 / B notices
1a	Nonemployee compensation: total paid for services in the year	Bill payments and cheques to the vendor, excluding card and payment-app payments, and excluding reimbursed goods billed separately
1b	Cash tips (new for 2026)	Only if you paid tips through to the contractor
1c	Treasury tipped occupation code (new)	Only with box 1b
1d	Overtime compensation (new)	Only if it applies
2	Tick if you sold $5,000 or more of consumer products to the recipient for resale	Direct sales businesses only
3	Excess golden parachute payments	Rare
4	Federal income tax withheld, including backup withholding	Any backup withholding you took
5 to 7	State tax withheld, state and payer's state number, state income	Only where your state requires it

Common mistakes

Using the old $600 threshold for 2026 payments, or missing someone who crossed $2,000 late in the year.
Including payments made by credit card or payment app.
Leaving out a contractor because you never got their W-9. You still file, with backup withholding applied.
Issuing a 1099-NEC to a corporation, or skipping one for an attorney.
Reporting rent here. Rent goes on Form 1099-MISC.
Filing on paper when you have 10 or more information returns in total.

How to file Form 1099-NEC

Collect W-9s before paying. Get a Form W-9 from every contractor at the start, so the name and TIN are on file before year-end.
Total each contractor's payments. Add up 2026 payments by cash, cheque and bank transfer, and compare each total with the $2,000 threshold.
Check names and TINs. Use the IRS TIN Matching program if you are registered, and correct anything that does not match the W-9.
Send Copy B to each contractor. Mail or deliver it by February 1, 2027, or send it electronically if the contractor has agreed.
File Copy A with the IRS. E-file through IRIS (the IRS retired its older FIRE system for 2027 filings) or a filing service, or mail official red-ink Copy A with Form 1096 if you file fewer than 10 returns in total.

How AcboBooks fills it in

In AcboBooks 0.2.1, you tick the 1099 box on a vendor and pay them as usual. Accountant → 1099 Forms opens the 1099-NEC Wizard for the year you choose.

Threshold defaults to $2,000 for 2026 and later ($600 for earlier years), and you can change it.
Lists each 1099 vendor with payments in the year: total paid from bill payments and cheques (card charges are not counted), TIN and mailing address you can edit and save, a red outline when the TIN is missing, and a File tag for vendors at or over the threshold.
Print saves a one-page 1099-NEC-style PDF per vendor with payer and recipient names, addresses and TINs, the nonemployee compensation total and box 4 at $0.00.
Reports → 1099 Summary lists the same vendor totals.

What it leaves to you

The printed page is a plain-paper statement for the contractor, labelled box 1; on the 2026 form the amount goes in box 1a. It does not fill boxes 1b to 1d, 2, 3 or state boxes.
AcboBooks does not e-file. File Copy A through IRIS or a filing service, or on official red-ink forms with Form 1096.

Described as of AcboBooks 0.2.1. See the 1099 wizard

Questions

What is the 1099-NEC threshold for 2026?

$2,000 or more paid to a person during 2026, up from $600. It applies to payments made after December 31, 2025, and may be indexed for inflation from 2027. The threshold is about reporting only; the contractor owes tax on every dollar.

When is the 2026 Form 1099-NEC due?

Monday, February 1, 2027, to both the contractor and the IRS, because January 31 is a Sunday.

How do I e-file 1099-NEC forms now?

Through the IRS Information Returns Intake System (IRIS), either its free Taxpayer Portal for keying forms or its application-to-application channel for software, or through a filing service. The IRS's older FIRE system is retired for filings in 2027.

Do I send a 1099-NEC to an LLC?

It depends how the LLC is taxed. A single-member LLC taxed as a sole proprietorship or an LLC taxed as a partnership gets one; an LLC taxed as a corporation generally does not. The W-9 tells you which.

Do I need a 1099-NEC for payments I made by credit card or PayPal?

No. Payments by card or through a payment settlement entity are reported by the processor on Form 1099-K. Leave them out of your 1099-NEC total.

Sources

Checked against these sources on October 25, 2026. Dates assume a calendar year and apply the next-business-day rule for weekends and holidays.

General information, not tax or legal advice. Forms, thresholds and dates change; confirm with the IRS and SSA or a tax professional before you file.