Do I Need to Send My Contractor a 1099 for 2026?

Yes — if you paid an individual contractor or unincorporated business $2,000 or more for services during 2026, you generally need to send them a 1099-NEC. That threshold changed this year under the One Big Beautiful Bill Act (OBBBA), rising from the old $600 limit. The deadline to send the form to your contractor and file it with the IRS is February 1, 2027 (since January 31, 2027 falls on a Sunday).

What Changed in 2026 — The New $2,000 Threshold

For years, the magic number was $600. If you paid a contractor $600 or more for services in a year, a 1099-NEC was required. For tax year 2026, that threshold rose to $2,000 per payee, thanks to the OBBBA. The new figure is indexed for inflation starting in 2027, so it may continue to adjust going forward.

What does that mean practically? If you paid a Simpsonville handyman $1,800 to renovate your office in 2026, you are not required to send a 1099-NEC — you fell below the new threshold. But if that same contractor billed you $2,500 across the year, the form is required.

A few things to keep in mind about how the threshold works:

• It applies to the total paid to that individual or business across the whole calendar year — not per project or per invoice.
• It covers payments for services, not for goods or products.
• Payments made to corporations (including S-corps and C-corps) are generally exempt — but always confirm with your CPA for exceptions like attorney payments.
• The threshold applies to cash, check, and direct bank transfers — not payments processed through credit cards or payment apps (those are covered separately by the 1099-K rules).

Which Form Do You File, and Who Gets One?

There are two 1099 forms most small businesses deal with:

Form	Use it for	2026 Threshold
1099-NEC	Non-employee compensation — paying a contractor for services	$2,000 per payee
1099-MISC	Rents, royalties, prizes, attorney fees, and certain other payments	$2,000 per payee (most boxes)

For the vast majority of Upstate SC small business owners, the 1099-NEC is the form you'll use most. Think: the independent bookkeeper you hired before switching to Datamize, the freelance graphic designer who built your logo, the landscaper who handles your commercial property, or the independent HVAC tech who services your equipment.

Now is a great time to review your contractor payments for the year and confirm who crosses the $2,000 mark — because you'll also need a W-9 on file for each one (more on that below). If you're also thinking about cleaning up your year-end books more broadly, our post Why Year-End Is the Best Time to Hire a Bookkeeper walks through what that process looks like.

What You Need Before You Can File — The W-9

You cannot fill out a 1099 without your contractor's legal name, address, and Tax Identification Number (TIN) — either their Social Security number or their Employer Identification Number (EIN). The way you collect that information is by asking them to complete a Form W-9.

Here's a simple checklist to get 1099-ready before the February 1, 2027 deadline:

1. Pull a list of every contractor you paid in 2026.
2. Total up payments per contractor across the full year.
3. Flag anyone at $2,000 or more for a 1099-NEC.
4. Confirm you have a completed W-9 on file for each flagged contractor.
5. Request missing W-9s now — don't wait until January when contractors are harder to reach.
6. Prepare and send 1099-NECs to contractors and file copies with the IRS by February 1, 2027.

One more thing: if you're uncertain whether a worker is a contractor or an employee, that's worth resolving carefully. Misclassifying an employee as a contractor can expose your business to back payroll taxes, penalties, and interest — so when in doubt, talk with your CPA or tax preparer before the year closes.

How Datamize Helps

• Year-end 1099 and W-2 filing is included in our back-office services — we track who needs a form and get them filed on time.
• W-9 tracking throughout the year so you're not scrambling for contractor information in January.
• Clean, organized books that make it easy to identify total payments per contractor — no manual digging required. Bookkeeping starts at $189/month.
• Coordination with your CPA so your 1099s, W-2s, and payroll taxes tie out with your financial records.
• Plain-English answers when you're unsure whether a worker should get a 1099 or a W-2 — and a referral to your tax professional when the question requires legal or tax advice.

Book your free 30-minute discovery call and let's make sure your contractor paperwork is handled before the January rush hits.

Frequently Asked Questions

What happens if I miss the 1099 deadline?

The IRS can assess penalties for late or unfiled 1099s, and the amount increases the longer the form is overdue. The deadline for 2026 1099-NECs is February 1, 2027. Talk with your CPA or tax preparer if you think you may have missed a prior-year filing — there are options for correcting late filings.

Do I need to send a 1099 to an LLC?

It depends on how the LLC is taxed. Single-member LLCs taxed as sole proprietors and multi-member LLCs taxed as partnerships generally do receive 1099s when the threshold is met. LLCs taxed as corporations are typically exempt. The W-9 the contractor fills out will indicate their tax classification — that's another reason to collect W-9s before you pay, not after.

I paid a contractor through Venmo or PayPal. Do I still send a 1099-NEC?

Generally, no — if you paid through a third-party payment network like Venmo, PayPal, or Cash App, the payment platform is responsible for reporting via a 1099-K (at the $20,000 / 200 transaction threshold for 2026). That said, rules can be nuanced, so confirm with your CPA or tax preparer for your specific situation before assuming you're off the hook.

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This article is for general educational purposes and isn't tax or legal advice. Tax rules change and every business is different, so talk with your CPA or tax preparer before making decisions. Datamize Business Services provides bookkeeping and payroll services and works alongside your tax professional.

Datamize Business Services is a Greenville, SC bookkeeping and payroll firm led by NACPB-certified bookkeeper Tomeka Capps, serving small businesses across the Upstate.