New 1099-K and 1099-NEC Reporting Thresholds: What Changed for 2025 and 2026
Part of our 2025 Tax Law Changes guide — the complete breakdown of the One Big Beautiful Bill Act.
Information reporting saw two notable changes in the 2025 One Big Beautiful Bill Act, and both matter for preparers and the businesses they serve.
Form 1099-K
The much-debated $600 reporting threshold for third-party settlement organizations (payment apps and online marketplaces) was repealed and restored to the prior threshold — generally more than $20,000 in gross payments and more than 200 transactions. This reverses years of phase-in confusion and means far fewer casual sellers will receive a 1099-K.
Forms 1099-NEC and 1099-MISC
The long-standing $600 threshold for reporting nonemployee compensation and miscellaneous payments is rising to $2,000 (with future inflation indexing), beginning with payments in a defined start year. Businesses will issue fewer of these forms for small vendors.
What this does not change
- Taxability is unchanged. Income is taxable whether or not a form is issued — the thresholds affect reporting, not whether the income counts.
- Backup withholding and TIN rules still apply.
- State reporting thresholds may differ from the federal rules.
Remind clients that a lower volume of 1099s does not mean lower tax — good books and records matter more than ever when third-party forms stop arriving.
This article is educational and current as of its publication date. Federal tax provisions — dollar thresholds, phase-outs, and effective dates — change frequently and many items here are temporary. Confirm the current statute, IRS guidance, and your client’s facts before relying on any point below. Not legal or tax advice.
