1099 for contractors: who gets one, and when

If you paid a contractor $2,000 or more for services during 2026, you generally file Form 1099-NEC for them. The threshold was $600 for payments made before 2026. A 2025 federal law raised it, so an older article may show the lower figure. The IRS instructions say it may be adjusted for inflation beginning in calendar year 2027. The form goes to the contractor and the IRS by January 31.

Who gets a 1099-NEC

You file Form 1099-NEC for a person you paid for services in the course of your trade or business. That includes services by someone who isn’t your employee, parts and materials included. Nonprofits and government agencies follow the same rule.

• Corporations usually don’t get one. Payments to a corporation, including an LLC taxed as a C or S corporation, generally aren’t reported. Payments for legal services are the exception: those are reportable even when the lawyer is a corporation.
• Card and payment app payments don’t go on your form. When you pay by credit card or payment card, or through a third-party network, the processor reports it on Form 1099-K. You don’t also file a 1099-NEC for it.
• Rent is a different form. Rent goes on Form 1099-MISC, box 1, not Form 1099-NEC.
• Backup withholding overrides the threshold. If you withheld any federal income tax from someone under the backup withholding rules, you file Form 1099-NEC for them regardless of the amount you paid.

If customers pay you by card or app, the same rule runs the other way: the processor may send you a 1099-K. The IRS 1099-K page currently lists a payment app and marketplace threshold of more than $20,000 in more than 200 transactions, and no threshold for card processors.

Whether a particular worker is a contractor or an employee is a separate question. If you aren’t sure, check with a CPA.

The calendar

What	When
Send Form 1099-NEC to the contractor	By January 31
File Form 1099-NEC with the IRS	By January 31

The IRS instructions say a due date that falls on a Saturday, Sunday or legal holiday moves to the next business day. January 31, 2027 is a Sunday, so for payments made in 2026 the due date moves to February 1, 2027.* The IRS had not printed that date when this page was checked; confirm it on the instructions before you rely on it.

The W-9 step

Form W-9 is how a contractor gives you their correct name and taxpayer identification number. For an individual, that is generally a social security number. It is what goes on the 1099.

The IRS sets no deadline for asking. Collect it before the first payment, so you aren’t chasing numbers in January, and because a missing number triggers backup withholding.

Backup withholding

Backup withholding is a flat 24% taken out of payments. It applies in two cases:

• The contractor doesn’t give you their taxpayer identification number in the required manner.
• The IRS tells you the number they gave is incorrect.

You send what you withhold to the IRS. The IRS pages on backup withholding and Topic 307 cover the mechanics.

How to file

Filing 10 or more information returns of any kind in a year means you must file them electronically. The IRS runs a free system for it, the IRIS Taxpayer Portal. Below that, paper filing is still allowed.

What a miss costs

The IRS charges a penalty for each return not filed correctly or on time. These are the amounts for returns due in 2027:

Filed	Per return
Up to 30 days late	$60
31 days late through August 1	$130
After August 1, or not filed	$340
Intentional disregard	$690

Small businesses have yearly maximums of $244,500, $698,500 and $1,397,000 for the first three tiers. Intentional disregard has no maximum.

Do this

1. Add up what you paid each contractor for services in 2026. Leave out card and payment app payments, which the processor reports on Form 1099-K. The IRS filing requirements page lists what is reportable.
2. Get a Form W-9 from each contractor before the first payment. The W-9 page has the form.
3. Check your total against $2,000. At or above it, you file Form 1099-NEC. You also file one, whatever the amount, for anyone you backup-withheld from. Rent goes on Form 1099-MISC. The instructions explain each box.
4. Withhold 24% if a trigger applies. See backup withholding.
5. File and send by the due date. That is January 31, or the next business day when it lands on a weekend. File through the free IRIS portal. With 10 or more returns, it must be electronic.
6. Missed the date? File anyway. The penalty page shows how the amounts step up with time.

If you’re the contractor being paid, self-employment tax and quarterly estimated taxes are your side of it. State filings are on your state’s Stay compliant page.