For the first time since 1954, the dollar amount that triggers a 1099 form has moved. Starting with payments made in 2026, the reporting threshold for Form 1099-NEC and Form 1099-MISC rises from $600 to $2,000 under the One Big Beautiful Bill Act (OBBBA) — and it will now adjust for inflation every year going forward.
What actually changed
Since 1954, any business that paid an independent contractor $600 or more in a year had to issue a Form 1099-NEC. The One Big Beautiful Bill Act, signed July 4, 2025, raises that bar to $2,000 for payments made starting in 2026, and indexes it to inflation beginning in 2027. The same $2,000 threshold applies to Form 1099-MISC, used for things like rent, prizes, and legal settlements.
This does not make the income tax-free
The single most important thing to understand: the reporting threshold has never determined whether income is taxable. If a client pays you $1,400 for a project in 2026, they are no longer required to send you a 1099-NEC — but you still owe income tax and self-employment tax on that $1,400, exactly as before. Fewer forms arriving in your inbox in January is not the same as fewer dollars owed in April.
Why this matters more for smaller freelance relationships
This change mainly affects freelancers with several small clients rather than one or two large ones — think a freelance writer with a dozen $800-$1,800 assignments across the year, none of which will now generate a 1099-NEC. Your own bookkeeping becomes the only record of that income unless you keep it yourself, since you can no longer rely on a stack of forms arriving each January to reconstruct your gross revenue.
What to tell clients who ask if they still need to pay you properly
Some clients may mistakenly assume that not issuing a 1099 means they don't need to report the payment as a business expense, or that you don't need to report it as income. Neither is true. The threshold change affects the payer's IRS filing obligation only — it has no effect on your obligation to report all self-employment income, regardless of size, on Schedule C.
Frequently asked questions
Does the 1099-K threshold change too?
Yes, separately — the 1099-K threshold for payment apps and marketplaces reverted to $20,000 and 200 transactions under the same law, after previously being scheduled to drop to $600. See our guide to the 1099-K threshold for the full breakdown.
Do I need to report income under $2,000 if no 1099 was issued?
Yes. All self-employment income is taxable and must be reported on Schedule C regardless of whether any client issued you a 1099 form for it.
When does the $2,000 threshold take effect?
It applies to payments made starting in the 2026 calendar year, meaning the 1099-NEC forms clients issue in January 2027 for 2026 work will use the new $2,000 threshold.