What is the threshold for issuing a 1099-NEC?

$600 or more in total payments to a non-employee for services during the calendar year, in the course of your trade or business. Below $600 to a given payee, no 1099-NEC is required — though the recipient still owes tax on the income.

Do I issue a 1099-NEC if I paid by credit card or PayPal?

No. Payments made by credit card, debit card or third-party network are reported by the processor on Form 1099-K. Issuing a 1099-NEC as well would double-report the income — only cash, check and ACH/bank transfers count toward your obligation.

When are 1099-NEC forms due?

Both the recipient copy and the IRS copy are due January 31 — there's no later deadline for the IRS copy. Businesses filing 10 or more information returns in total must file electronically.

What happens if I file a 1099-NEC late?

The penalty scales with lateness: roughly $60 per form if filed within 30 days, $130 up to August 1, and $340 after that, rising to $660 per form for intentional disregard — with no annual cap for willful violations. For a business with 20 contractors, ignored 1099 obligations can exceed $10,000.

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Business & Corporate Tax

1099-NEC Filing Requirements: What Small Businesses Need to Know

If your business pays independent contractors, 1099-NEC filing is a legal requirement with real penalties. The rules are specific and the deadline is early — planning ahead makes January painless.

SMAART Tax Team

January 20, 2026

5 min read

|Reviewed by Lisa Terrell, Enrolled Agent