What is the 1099 reporting threshold?

For services paid to a non-employee in the 2025 calendar year, the 1099-NEC/1099-MISC threshold is $600. Any single payee paid $600 or more in the course of business gets a form. That threshold is changing: for payments made after December 31, 2025, it rises to $2,000, per the One Big Beautiful Bill Act. A separate form, 1099-K, uses a completely different threshold: $20,000 in gross payments and more than 200 transactions through a payment platform, and that isn't changing for 2025 or 2026.

What is the threshold for Form 1099-NEC and 1099-MISC (services payments)?

The default is $600 for services paid during the 2025 calendar year, the returns being filed now in early 2026. A business must file a 1099-NEC for any person who isn't an employee, whether an individual, disregarded-entity LLC, partnership, or (for legal services only) even a corporation, once total payments for services in the year reach $600. This is the threshold a preparer checks at year-end vendor review: any 1099-eligible payee at or above $600 for the year needs a form, regardless of whether the payment was one lump sum or many small invoices that add up.

Is the $600 threshold changing?

Yes. For payments made after December 31, 2025, the threshold rises from $600 to $2,000, and beginning in calendar year 2027 that $2,000 figure gets adjusted for inflation. That means 2025-year payments (the returns due January 31, 2026) still use the $600 default; the higher $2,000 threshold applies starting with payments made in 2026, reported on returns due in early 2027. A firm doing year-end 1099 review for TY2025 shouldn't apply the new $2,000 number yet. That's a change for next year's intake process, not this year's.

What is the threshold for Form 1099-K (payment platforms)?

The 1099-K threshold is $20,000 in gross payments and more than 200 transactions in a calendar year, per payment platform. This is a different form covering a different situation. Form 1099-K is issued by payment settlement entities (PayPal, Square, Stripe, card processors) for payments processed through their platform, not by a business paying a vendor directly. The $20,000/200-transaction threshold was retroactively reinstated by the One Big Beautiful Bill Act, reversing a planned drop to $600 that had been enacted (but never fully took effect) under the American Rescue Plan Act of 2021.

Why do businesses confuse the 1099-NEC threshold with the 1099-K threshold?

Both get shortened to "the 1099 threshold" in conversation, but they cover different payment flows and use different dollar figures, which is the most common source of confusion at intake. 1099-NEC/MISC applies to a business paying a contractor or vendor directly for services: did this payee get $600+ this year? 1099-K applies to payments processed through a third-party settlement platform: did this payee cross $20,000 and 200 transactions on that platform this year? A preparer reviewing a client's 1099 exposure should ask which payment channel is in question before quoting a threshold number.

What should a firm check before year-end 1099 filing?

Confirm which form and which year's threshold applies before pulling the vendor list. For TY2025 filings due January 31, 2026: use $600 for direct services payments (1099-NEC/MISC) and $20,000/200 transactions for platform-processed payments (1099-K). For TY2026 payments going forward, the services threshold moves to $2,000, worth flagging now so next year's intake checklist doesn't default to the old $600 figure out of habit.