Quick answer
Form 1099-NEC is the form clients use to report what they paid you as an independent contractor. Starting with payments made in 2026, a business only has to send you one if it paid you $2,000 or more during the year. The old threshold was $600, unchanged since 1954. From 2027 the $2,000 will rise with inflation.
The change affects paperwork, not taxes. Every dollar you earn is still taxable, whether or not you get a 1099.
What changed and when
| Payments made in | 1099-NEC required when a client pays you | Form arrives by |
|---|---|---|
| 2025 | $600 or more | January 31, 2026 |
| 2026 | $2,000 or more | February 1, 2027 (Jan 31 falls on a Sunday) |
| 2027 onward | $2,000 adjusted for inflation | January 31 of the next year |
The same $2,000 threshold applies to most payments on Form 1099-MISC (rents, prizes and other income). Royalties still use a $10 threshold.
What it means for freelancers
- You’ll get fewer 1099s. A client who paid you $1,500 in 2026 doesn’t have to send one.
- You still report all income. The IRS is clear that all income is taxable, reported or not. Your total income on Schedule C comes from your own records, not from adding up forms.
- Your books matter more. With fewer forms to cross-check, keep a clean record of every invoice and payment. See How to Report Income Without a 1099.
- Backup withholding follows the same line. Clients only withhold 24% backup withholding (if you didn’t give them a valid TIN) on payments that would need a 1099.
What’s on a 1099-NEC
| Box | What it shows |
|---|---|
| Payer and recipient info | Client’s name and TIN; your name, SSN or EIN, and address |
| Box 1 | Nonemployee compensation: the total they paid you |
| Box 2 | Checked if they paid $5,000+ of consumer products for resale |
| Box 4 | Federal income tax withheld (usually backup withholding) |
| Boxes 5 to 7 | State tax withheld and state income |
The amount in Box 1 goes into your gross receipts on Schedule C, line 1. If a 1099 amount looks wrong, see Wrong Amount on Your 1099? How to Get It Corrected.
Payments that don’t go on a 1099-NEC
- Card, PayPal, Stripe or Venmo business payments. When a client pays you through a payment processor, the processor reports it (on a 1099-K, if it meets that form’s threshold), not the client.
- Payments to corporations (C-corps and S-corps), with some exceptions such as attorneys.
- Payments for goods, rather than services.
- Payments from individuals for personal services (a homeowner hiring you to design a wedding invitation).
If you hire other freelancers
The rules flip when you’re the one paying:
- Collect a Form W-9 from every contractor before you pay them.
- File a 1099-NEC for anyone you pay $2,000 or more in 2026 by check, direct deposit or bank transfer.
- Send it to the contractor and file it with the IRS by February 1, 2027 for 2026 payments.
- If you file 10 or more information returns in total, you must e-file, for example through the IRS’s free IRIS portal.
- Some states keep their own lower thresholds for state 1099 filing. Check yours.
Worked example
Nina is a freelance copywriter. In 2026:
| Client | Paid by | Amount | 1099? |
|---|---|---|---|
| Agency A | Bank transfer | $18,000 | 1099-NEC |
| Startup B | Bank transfer | $1,800 | None (under $2,000) |
| Local shop C | Check | $600 | None (under $2,000) |
| Client D | Stripe invoice | $9,000 | Reported by Stripe only if over $20,000 and 200 transactions |
She receives one 1099-NEC for $18,000, but she must report $29,400 on Schedule C.
Frequently asked questions
Do I have to report income under $2,000 if I don’t get a 1099?
Yes. The threshold only decides whether the client files a form. All income is taxable.
Does the $2,000 threshold apply to my 2025 taxes?
No. For payments made in 2025, the $600 threshold still applies. The $2,000 rule starts with 2026 payments.
Can a client send me a 1099 for less than $2,000?
Yes. Businesses may file voluntarily. Just report the income once.
Do I attach my 1099-NEC to my tax return?
No. Keep it with your records. The IRS already has a copy.
This article is general information, not tax advice. Consult a CPA or Enrolled Agent for your situation.
Related guides
- What to Do If You Didn’t Receive a 1099
- How to Create a Professional Invoice (Free Template)
- Best Invoicing Apps for Freelancers
- How to Get Paid by International Clients as a US Freelancer
About this guide
Written by the Freelancer Tax HQ editorial team, based on our professional experience, official US government sources (IRS, SSA and other agencies) and reputable informational articles listed in the sources below. Last reviewed on . Tax rules change often, and we update this guide when they do. Read our editorial policy or report an error.
Sources
Patriot Software: 1099 reporting threshold increases to $2,000; IRS: About Form 1099-NEC; IRS Instructions for Forms 1099-MISC and 1099-NEC; IRS Form 1099-K FAQs. Example figures are FreelancerTaxHQ illustrations.
Official resources linked in this guide: IRS: Backup withholding; IRS: Tax preparer credentials.