If your LLC pays independent contractors, you now file Form 1099-NEC only for those you paid $2,000 or more during the year — up from $600. The change applies to tax years beginning after 2025, so it affects the forms for 2026 payments that are due in early 2027 (IRS instructions for Forms 1099-MISC and 1099-NEC).
What changed
The IRS instructions now say the minimum threshold for reporting nonemployee compensation increased to $2,000 for tax years beginning after 2025, and that it may be adjusted for inflation beginning in calendar year 2027. The same $2,000 figure applies to payments to attorneys reported in box 1a of Form 1099-NEC.
In practice, a contractor you paid $1,500 in 2026 no longer needs a 1099-NEC from your LLC. A contractor you paid $2,000 or more still does.
Who gets a 1099-NEC
Your LLC generally files a 1099-NEC for each person you paid $2,000 or more in the year for services in the course of your business — freelancers, consultants and other contractors who aren’t your employees. Employees get a Form W-2 instead.
Generally exempt:
- Payments to corporations, including LLCs that are taxed as C or S corporations.
- Payments made by credit card, debit card or a payment app that processes third-party network transactions. The payment processor reports those on Form 1099-K, so you don’t also issue a 1099-NEC.
- Payments for merchandise, freight and similar goods (Form 1099-NEC is for services).
The big exception: attorneys’ fees of $2,000 or more are reportable even when the law firm is a corporation.
Paying another LLC
An LLC isn’t automatically exempt. If the contractor’s LLC is taxed as a C or S corporation, payments are generally exempt. If it’s a single-member LLC (disregarded entity) or a partnership LLC, it generally gets a 1099-NEC once you pass $2,000. Ask every contractor for a Form W-9 before you pay them: it shows their tax classification and taxpayer identification number.
Key dates for 2026 payments
| What | Due |
|---|---|
| Form 1099-NEC to each contractor | February 1, 2027 |
| Form 1099-NEC to the IRS (paper or electronic) | February 1, 2027 |
The normal deadline is January 31; when it falls on a weekend or legal holiday, the due date moves to the next business day. January 31, 2027 is a Sunday. See every federal date in our LLC tax deadlines for 2027.
How to file
- Collect W-9s from every contractor you paid this year, ideally before the first payment.
- Total what you paid each one in 2026, leaving out card and payment-app payments (those go on the processor’s 1099-K).
- Prepare a 1099-NEC for each contractor at $2,000 or more (attorneys included).
- Check whether you must e-file. If you’ll file 10 or more information returns in total — all types combined — e-filing is required. The IRS’s free IRIS portal handles Forms 1099; most accounting and payroll software can file them too.
- Send copies to contractors and file with the IRS by February 1, 2027.
Common mistakes
- Still issuing forms at $600. Not wrong to send extra forms, but it’s work you no longer have to do for 2026 payments.
- Skipping attorneys because their firm is a corporation — attorneys’ fees are the exception.
- Double-reporting payment-app payments that the processor already reports on Form 1099-K.
- Not getting a W-9 up front, then chasing tax IDs in January.
Not sure how your LLC is taxed in the first place? Start with how an LLC is taxed, or see how to file taxes for an LLC.
Frequently asked questions
Is the 1099-NEC threshold $600 or $2,000?
$2,000 for tax years beginning after 2025, so for payments you make in 2026 and report in early 2027. The IRS says the amount may be adjusted for inflation beginning in 2027.
Do I send a 1099-NEC to another LLC?
It depends on how that LLC is taxed. Payments to an LLC taxed as a C or S corporation are generally exempt; a single-member LLC or a partnership LLC generally gets one if you paid it $2,000 or more for services. A Form W-9 tells you which.
When is Form 1099-NEC due in 2027?
February 1, 2027 — both to the contractor and to the IRS — because January 31, 2027 is a Sunday.
Do I have to e-file my 1099s?
If you file 10 or more information returns in total during the year (all types combined), you must e-file. The IRS’s free IRIS portal accepts Forms 1099.
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