“1099 thresholds” aren’t one-size-fits-all. This guide explains how the rules differ across the common forms, what payments do and don’t count, and what to watch for with recipient furnishing and state copies as you prepare 2026 filings.
Why Are 1099 Filing Thresholds (2025) Important?
The IRS uses 1099 forms’ thresholds to match taxpayer reports, with a focus on higher-risk transactions for compliance purposes. The thresholds also create a trigger for reporting. Ihresholds also help to exempt low payments from reporting, which in turn reduces the administrative burden on businesses while ensuring accurate documentation of higher-risk payments, addressing the risk of non-compliance.
Besides, when thresholds are met, but information returns are not filed, the IRS can penalize payers. Late or missed filings result in penalties ranging from $60 to $340 (year due 2026), and at least $680 per return for intentional disregard, with no maximum.
Federal Dollar Limits for 1099 Forms At a Glance
| Form | Payment Type | Standard thresholds | No-Threshold Triggers / Notes |
|---|---|---|---|
| 1099-NEC | Nonemployee compensation (Box 1) | $600 | The direct sales checkbox (Form 1099-NEC, Box 2 or Form 1099-MISC, Box 7) does not trigger backup withholding. Backup withholding at 24% applies only when required under §3406 (e.g., missing/incorrect TIN, IRS underreporting notice, or certification failures) and can apply regardless of whether the 1099-NEC $600 rule is met. |
| 1099-MISC | Rents (Box 1), royalties (Box 2), prizes (Box 3), medical (Box 6), attorney proceeds (Box 10) | $600 (most boxes) | Box 10 covers gross proceeds paid to an attorney, including payments to corporations providing legal services; royalties (Box 2) are reportable at $10. |
| 1099-INT | Interest (Boxes 1, 3, 8) | $10 | Even if the 1099-INT $10 limit is not met, filing is required if any federal income tax is withheld under backup withholding or if any foreign tax is paid on interest. |
| 1099-DIV | Dividends (Box 1a), Capital-gain dist. (Box 2a) | $10 | File for any amount if foreign tax is paid or federal income tax is withheld; generally $10 for dividends/capital-gain distributions, and $600 or more only for liquidating distributions. |
| 1099-K | TPSO / payment-card & marketplace payments | TPSO: > $20,000 & > 200 transactions; payment-card transactions remain reportable with no de minimis | $20,000/200 applies only to TPSO transactions; no de minimis for payment-card transactions. If backup withholding is taken, file regardless of the amount. (OBBBA/IRS guidance supersedes prior phased thresholds.) |
| 1099-A | Acquisition or abandonment of secured property (lender reporting) | No dollar thresholds | File when the lender acquires an interest in the secured property or knows of abandonment. If, in the same calendar year, a debt of $600+ is canceled in connection with the foreclosure/abandonment, you may file only Form 1099-C—completing Boxes 4, 5, and 7 on 1099-C satisfies the 1099-A requirement. |
| 1099-B | Proceeds from broker & barter exchange transactions | No dollar thresholds | Brokers file 1099-B for each sale or exchange of securities (covered or non-covered) and for barter-exchange transactions; for covered securities, report cost basis and applicable adjustments. |
| 1099-C | Cancellation of debt | $600 (canceled debt) | File when a reportable identifiable event occurs; see coordination rule with 1099-A above. |
| 1099-PATR | Taxable distributions from cooperatives | $10 | File for any amount if backup withholding occurred. |
| 1099-S | Proceeds from real-estate transactions | No dollar thresholds | Generally required for any sale/exchange of real property (limited exceptions, e.g., certified principal-residence exclusion). |
| 1042-S | U.S.-source income to foreign persons (FDAP, etc.) | No dollar thresholds | Report any amount of U.S.-source income subject to Chapters 3/4—even if reduced by treaty or otherwise not actually withheld. |
When Does the 1099 Form’s Dollar Limit Apply?
The dollar limit applies when your calendar-year total paid to the same recipient for the specific payment category on that form meets or exceeds the threshold for a payee.
Do note:
- Backup withholding (24%) requires you to file the appropriate 1099 Form regardless of the amount—report the federal income tax withheld in the form’s “federal income tax withheld” field (e.g., Box 4 on Forms 1099-NEC, 1099-MISC, 1099-INT, 1099-DIV, and 1099-K).
- ‘Royalty’ generally applies to minerals, music, and publishing rights, which translates to a threshold of $10 on Form 1099-MISC (Box 2).
- Attorney gross proceeds of $600 or more are reported on Form 1099-MISC, Box 10 (this includes payments to incorporated law firms). Attorney’s fees for services are reported on Form 1099-NEC, Box 1.
Forms with no dollar threshold (e.g., 1099-A, 1099-B, 1099-S, 1042-S) are filed whenever their triggering event occurs, regardless of amount.
Aggregation & Special Tests
- Calendar-year aggregation: Aggregate all payments to each recipient for the year.
- Multiple form triggers: The same recipient may require multiple forms, so keep that in mind and account for it.
- Split payments: Include all amounts you pay directly for services (cash, check, ACH, or noncash at fair market value) and do not include amounts you paid by credit card or third-party network, because the payment settlement entity reports those on Form 1099-K.
State-Level Variations
Each state sets its state 1099 thresholds and filing rules—there is no IRS category of “federal conforming” states. Some states require direct filing or have their own thresholds. Here are some examples:
- Connecticut requires filing Forms 1099-MISC and 1099-NEC for residents and for nonresidents when services are performed wholly or partly in CT, even if no CT income tax was withheld (1099-R for nonresidents is required only if CT tax was withheld).
- The District of Columbia requires copies of federal Form 1099 to report $600 or more (or amounts subject to DC withholding) for DC residents.
- Florida requires only Form 1099-K filed to the state under IRS §6050W thresholds.
- New Jersey generally requires filing when the amount paid or credited is equal to or more than $1,000 in a calendar year or if New Jersey income tax was withheld.
(State sourcing rules vary, but many states source nonemployee compensation to the location where the services are performed.)
Compliance Checklist for Payers
Taking note of these will help you stay compliant:
- Before making the first payment, obtain a W-9 and verify it. To help prevent “B” notices, you should also match TINs.
- Throughout the year, track the total payments made by the recipient’s TIN; the accounting software flags payments near thresholds.
- For a missing TIN, begin backup withholding immediately. If it’s a case of name/TIN mismatch (First “B” Notice), begin backup withholding no later than 30 business days after the CP2100/CP2100A notice date (or receipt date, if later) if you have not received a certified TIN response.
- If you are required to file 10 or more information returns in the year in aggregate across all types, you must e-file (paper is allowed only if you file fewer than 10 or have an approved waiver).
- Mark the important due dates on your calendar:
- Furnish recipient statements by February 2, 2026 (since January 31, 2026, is a Saturday) (except Forms 1099-B/DA/S and 1099-MISC for boxes 8 or 10, which are due February 17, 2026)
- File Form 1099-NEC with the IRS by February 2, 2026 (paper or e-file).
- For most other 1099s, file by March 2, 2026 (paper) or March 31, 2026 (e-file).
- Keep federal 1099 records at least 3 years from the due date (or 4 years if backup withholding was imposed, and 4 years for Form 1099-C).
Real-Life Scenarios
| Payment Scenario | Year-to-Date Amount | Threshold Met? | Required Form/Box |
|---|---|---|---|
| Three design invoices to a contractor | $550 | No | None (unless backup withholding applies) |
| Four photography gigs | $700 | Yes | 1099-NEC — Box 1 |
| Bank interest with 24% tax withheld | $9 | No (but report due to backup withholding) | 1099-INT — Boxes 1 & 4 |
| Catalog kits sold for resale | $5,500 | Yes | 1099-NEC — Box 2 or 1099-MISC — Box 7 (direct-sales checkbox only—no dollar amount) |
| Settlement: $40,000 paid to the attorney | $40,000 | Yes | 1099-MISC — Box 10 |
FAQs
1. Must a payer issue a 1099 form for every payment exceeding $600?
Only trade or business payments that meet the form’s requirements are included—personal payments are not.
2. Is interest under $10 ever reportable by a payer?
Yes. File Form 1099-INT if you withheld any federal income tax under backup withholding or any foreign tax on the interest, regardless of the dollar amount.
3. Do corporations ever receive 1099s from a payer?
Generally, payers don’t issue 1099-NEC/MISC to corporations, except for medical and health care payments (Form 1099-MISC, Box 6), attorney’s fees for services (Form 1099-NEC, Box 1), and gross proceeds paid to attorneys (Form 1099-MISC, Box 10). Form 1099-K is issued by the payment settlement entity (PSE), not by the payer.
4. How does the 10-return e-file mandate affect a payer?
If you are required to file 10 or more information returns in aggregate across all types for the year, you must e-file (paper allowed only if you file fewer than 10 or have an approved waiver).
5. What should a payer do after discovering an incorrect threshold filing?
File a CORRECTED return to fix an error on a return you already filed. If a return was omitted, file the original return as soon as possible.
6. Are accountable-plan reimbursements counted toward a payer’s thresholds?
Accountable plan rules apply to employees (amounts are excluded from wages and not reported on Form 1099). For nonemployees/contractors, reimbursements you pay are generally part of nonemployee compensation and count toward Form 1099-NEC reporting.
7. Does a payer aggregate payments across multiple subsidiaries?
Only if the subsidiaries have the same EIN. Even under a common parent, distinct EINs file independently.
The Bottom Line
Keep track of your payments and 1099 thresholds throughout the year and e-file 1099s accurately when triggers are hit. With 1099Online, payers can import payee data, verify TINs, and file Forms 1099 with the IRS using IRIS (with a valid Transmitter Control Code) in line with IRS e-file specifications.
Close your 1099s confidently—bulk import, real-time checks, and smooth e-filing across forms with 1099Online.