--- title: "Form 1099-NEC: What a Small Business Owner Must File and By When" description: "When a business files Form 1099-NEC for contractors, the $2,000 threshold that applies to payments made in 2026, and the January 31 due date." url: https://wallacecpa.multisites.ai/blog/form-1099-nec-small-business publisher: Wallace CPA phone: +1-877-682-1171 quote: https://wallacecpa.multisites.ai/contact --- # Form 1099-NEC: What a Small Business Owner Must File and By When File Form 1099-NEC for each person you paid at least $2,000 for services in the course of your business during 2026. The IRS instructions set a January 31 due date. For 2026 payments, January 31, 2027 falls on a Sunday, so the next business day applies. Small businessPublished August 24, 20263 min read ## Who has to file Form 1099-NEC? You file Form 1099-NEC when your business pays someone who is not your employee for services. The IRS instructions say to file it for each person you paid at least $2,000 for services performed by someone who is not your employee. That includes parts and materials. It also includes payments to an attorney. The test is about your business. Payments for personal items, such as a plumber at your home, do not count. The rule covers payments made in the course of your trade or business. ## What is the dollar threshold for 2026? For payments made in 2026, the threshold is $2,000. The IRS instructions say the minimum threshold for these reports increased to $2,000 for tax years beginning after 2025. The instructions add that it may be adjusted for inflation beginning in calendar year 2027. Earlier years used a $600 threshold. If you read an older article, check the year before you rely on it. Item Rule for payments made in 2026 Form 1099-NEC, box 1a for services Minimum paid to one person $2,000 or more Copy to the payee January 31, 2027 (a Sunday, so the next business day) Copy filed with the IRS January 31, 2027 (a Sunday, so the next business day) Backup withholding File even below the threshold if you withheld federal income tax The last row comes from the instructions: you must also file for each person from whom you withheld federal income tax under the backup withholding rules, whatever the amount. ## When is the 1099-NEC due? Both the payee copy and the IRS copy are due January 31. The IRS instructions say you must furnish the statements and file with the IRS by that date. The instructions also say that if a date falls on a Saturday, Sunday or legal holiday, the due date is the next business day. January 31, 2027 is a Sunday, so the due date for 2026 payments moves to Monday, February 1, 2027. Confirm the date on the IRS page before you file. Form 1099-MISC has later dates. Do not mix them up. The 1099-NEC is the early one. ## Do payments to corporations count? Generally, no, with exceptions. The IRS instructions say payments to a corporation generally need no 1099-NEC, including an LLC taxed as a C or S corporation. The instructions also say attorney fees must be reported even when paid to a corporation that provides legal services. Ask each contractor for a [Form W-9](https://wallacecpa.multisites.ai/glossary/form-w-9) before you pay. It records the name, tax classification and taxpayer identification number you need. For the form itself, read our [Form 1099-NEC glossary entry](https://wallacecpa.multisites.ai/glossary/form-1099-nec). ## What about card payments? Do not report them on a 1099-NEC. Payments made with a credit card or payment card are reported on Form 1099-K by the payment settlement entity. Keep a clear record of how you paid each vendor. That is a [bookkeeping](https://wallacecpa.multisites.ai/glossary/bookkeeping) habit worth building all year, not in January. ## What if the person is really an employee? Then a different form applies. Wages go on a [Form W-2](https://wallacecpa.multisites.ai/glossary/form-w-2) and bring [payroll tax](https://wallacecpa.multisites.ai/glossary/payroll-tax) duties. The 1099-NEC is for nonemployees only. Worker classification depends on facts, and a wrong call can be costly. Ask a CPA before you label someone a contractor. ## What if a contractor will not give me a taxpayer ID? Ask before the first payment, and keep the request on file. The IRS instructions say persons who have not furnished their taxpayer identification numbers to you are subject to backup withholding. For the rate and the steps, the instructions point to Publication 1099. This is why a Form W-9 belongs in your onboarding. It is far easier to collect in March than the following January. If a contractor refuses, talk to a CPA before you pay the rest of the invoice. ## Next step Wallace CPA helps small businesses with [bookkeeping and accounting](https://wallacecpa.multisites.ai/services/small-business-accounting). Call (877) 682-1171 or use the form at [/contact](https://wallacecpa.multisites.ai/contact) to set up your contractor records before year end. This post is general information, not advice for your situation. Talk to a CPA about your own situation before you file. ## Frequently asked questions ### What is the 1099-NEC threshold for 2026? The IRS instructions say you file Form 1099-NEC for each person you paid at least $2,000 for services in the course of your business. The threshold was $600 for earlier years. ### Do I need a Form W-9 from my contractor? The IRS instructions say you may use Form W-9 to get a payee's taxpayer identification number. A CPA can help you set a routine so you collect it before the first payment. ### Are payments by credit card reported on a 1099-NEC? No. The IRS instructions say card payments and certain other payments are reported on Form 1099-K by the payment settlement entity, not on Form 1099-NEC. ## Terms on this page - [Form 1099-NEC](https://wallacecpa.multisites.ai/glossary/form-1099-nec) - [S corporation](https://wallacecpa.multisites.ai/glossary/s-corporation) - [Bookkeeping](https://wallacecpa.multisites.ai/glossary/bookkeeping) - [Payroll tax](https://wallacecpa.multisites.ai/glossary/payroll-tax) - [Form W-2](https://wallacecpa.multisites.ai/glossary/form-w-2) - [Form W-9](https://wallacecpa.multisites.ai/glossary/form-w-9) ## Sources 1. [IRS: Instructions for Forms 1099-MISC and 1099-NEC (12/2026)](https://www.irs.gov/instructions/i1099mec) Written by Wallace CPA and checked against the sources above on August 24, 2026. Tax rules and dates change, so check the linked page before you act. General information, not advice for your situation. ## Keep reading - [Texas franchise tax: who files, when, and what no tax due meansThe Texas franchise tax is a business tax on entities formed in or doing business in Texas. The report is due May 15 each year.](https://wallacecpa.multisites.ai/guides/texas-franchise-tax) - [How long to keep tax records, and which onesThe IRS says to keep records that support your tax return until the period of limitations runs out. For most returns that is 3 years.](https://wallacecpa.multisites.ai/guides/how-long-to-keep-tax-records) - [Got an IRS notice? How to read it and what to do firstRead the whole notice, find its CP or LTR number, and note the reply date. A CP2000 is a proposal to change your return, not a bill.](https://wallacecpa.multisites.ai/guides/irs-notice-what-to-do) - [IRS payment plans and offers in compromise: what each one isAn IRS payment plan lets you pay a tax bill over time. An offer in compromise asks the IRS to accept less than the full amount. The IRS decides each case.](https://wallacecpa.multisites.ai/guides/irs-payment-plans-and-offers-in-compromise) - [How to protest your property tax value in Tarrant and Denton countiesIn Tarrant and Denton counties, you protest your property value with your county appraisal district.](https://wallacecpa.multisites.ai/guides/property-tax-protest-tarrant-denton) - [S corporation, LLC or sole proprietor: how the choices differ in TexasA sole proprietor reports business income on Schedule C of the personal return. An LLC is a legal structure, and its federal tax treatment depends on what it...](https://wallacecpa.multisites.ai/guides/s-corp-llc-sole-proprietor-texas) ## Talk to Wallace CPA Call the Southlake office and say what you need: a return, an IRS letter, your books or a new business. Have the notice or last year's return nearby if you have one. [Call (877) 682-1171](tel:+1-877-682-1171)[Send a message](https://wallacecpa.multisites.ai/contact) 180 State Street, Suite 225, Southlake, TX 76092