OBBBA Revamps 1099 Filing Rules — Less Paperwork Ahead!

What’s Changing?

Starting January 1, 2026, businesses must only file Form 1099-NEC or Form 1099-MISC if they pay an independent contractor or vendor $2,000 or more in a calendar year( starting 2026) — a jump from the long-standing $600 threshold. And yes, it’s a dynamic threshold: it’ll be adjusted for inflation annually beginning in 2027.

Goodbye, 1099-Ks for Minor Payments!

The Act also reverses the recent trend of declining thresholds for Form 1099-K (used by platforms like PayPal or Etsy). Now, these third-party settlement organizations must issue a 1099-K only if a recipient receives over $20,000 AND has more than 200 transactions in a year. This rule applies retroactively to 2022.

Digital payment with a phone

Why It Matters

• Simpler compliance — fewer low-dollar transactions trigger filings.

• Reduced paperwork — streamlined tracking benefits small and mid-size businesses and gig workers alike.

• Still, keep records — all income must be reported on tax returns, even if forms aren’t issued.

  
  

In Summary:

With OBBBA, businesses get a much-needed break from tedious reporting. Form 1099 thresholds rise to $2,000, and the dreaded 600−limit Form 1099-K mostly disappears — easing burdens while keeping the IRS informed.