Form 1099-NEC: How to Fill It Out for 2026 Payments

If you paid a freelancer, contractor, or other nonemployee $2,000 or more for services in 2026, you likely owe them a Form 1099-NEC by early 2027. This year's form looks different from the one you filled out last winter: the IRS raised the reporting threshold and split nonemployee compensation into four separate boxes. Here is exactly how to fill it out for a single contractor, field by field.

Who Needs to Receive a 1099-NEC in 2026

You must issue Form 1099-NEC to any person or unincorporated business you paid $2,000 or more during 2026 for services performed in the course of your trade or business. That threshold jumped from $600 under the One Big Beautiful Bill Act (OBBBA), and it applies to payments made on or after January 1, 2026, so 2025 payments still follow the old $600 rule.

Typical recipients include:

• Freelancers and independent contractors (designers, writers, developers)
• Consultants and professional service providers not paid as W-2 employees
• Attorneys (payments to law firms are reportable regardless of the entity type)
• Gig workers and independent sales agents paid commissions directly, outside a platform that already issues its own 1099-K

Corporations are generally exempt, with the notable exception of attorney fees. If you are unsure whether a payee is a corporation, check the W-9 they should have sent you before their first payment, box 3 shows their entity type.

What's New for 2026: Higher Threshold and New Boxes

Two changes from the OBBBA reshape this year's form:

• Threshold: $600 to $2,000. This is the biggest relief for small businesses that occasionally hire help. If you paid a contractor $1,800 for a one-off project in 2026, you no longer owe them a form. The threshold is scheduled to adjust for inflation starting in 2027.
• Nonemployee compensation moved from Box 1 to Box 1a, and three new boxes were added alongside it: Box 1b for cash tips paid to the worker, Box 1c for the worker's Treasury Tipped Occupation Code (TTOC), and Box 1d for qualified overtime compensation. These support new deductions for tipped and overtime income under the OBBBA. If you did not pay tips or overtime, which is the case for most 1099-NEC filers paying a single contractor a flat fee, you simply leave 1b through 1d blank and enter the full payment in Box 1a.
• Box 3, Excess Golden Parachute Payments, moved onto the 1099-NEC from the 1099-MISC. This only applies to specific severance-related payments and will not affect most small business filers.

For a routine payment to a freelance contractor with no tips or overtime involved, the practical change is simply that the number you used to put in Box 1 now goes in Box 1a.

What You Need Before You Start (Get a W-9 First)

Before you can fill out a single field, you need a completed Form W-9 from the contractor. It gives you their legal name, address, entity type, and taxpayer identification number (SSN or EIN), all of which you need to fill out the payer and recipient boxes correctly. If you have not collected one yet, send them our step-by-step W-9 guide and have them fill it out and sign it in a browser rather than mailing a paper copy back and forth.

Also gather:

• Your business's legal name, address, and EIN as the payer
• Total amount paid to the contractor during 2026 (add up invoices or payment records; do not include payments made via credit card or a third-party network like PayPal that already issues a 1099-K, those are excluded to avoid double reporting)
• State ID and state withholding amounts, if your state requires state-level 1099 reporting

Step by Step: Filling Out the Form

Form 1099-NEC has a Copy A (for the IRS, which must be the official scannable red-ink version if filing on paper) and Copy B (for the recipient, which you can print or send as a PDF). Most small businesses now file electronically through the IRS's Information Returns Intake System (IRIS) and only need to prepare the recipient copy themselves. Here is how to fill out that recipient copy:

1. Upload the blank 1099-NEC template to our PDF form filler. You can start from the official IRS PDF or one of the fillable templates in our IRS tax forms library.
2. Payer's information box (top left): enter your business name, street address, city, state, ZIP, and phone number.
3. Payer's TIN: your EIN (or SSN if you file as a sole proprietor without an EIN).
4. Recipient's TIN: the SSN or EIN from the contractor's W-9.
5. Recipient's name and address: copy exactly as written on their W-9, including any "doing business as" line.
6. Account number: optional, useful if you file more than one 1099-NEC for the same recipient in different years.
7. Box 1a, Nonemployee compensation: enter the total amount paid for services during 2026.
8. Boxes 1b through 1d: leave blank unless you paid cash tips or qualified overtime to this worker, which is uncommon for contractor payments.
9. Box 4, Federal income tax withheld: only fill this in if you withheld backup withholding, typically because the contractor failed to provide a valid TIN.
10. Boxes 5-7, state information: fill in only if your state requires it; leave blank for states with no such requirement.

Once every field is filled, add your signature if your internal process requires one (the IRS form itself does not have a required signature line), then use our e-signature tool to sign the transmittal or cover letter you send alongside it if your accountant requires one.

Sending Copies and Filing Deadlines

Unlike some other 1099 forms, the 1099-NEC has a single deadline for everyone: recipient copies and IRS filing are both due by February 1, 2027 for 2026 payments (the usual January 31 deadline falls on a Sunday). This applies whether you file on paper or electronically, so there is no extra buffer for e-filing like there is with the 1099-MISC.

• To the contractor: deliver Copy B by mail or as a downloaded PDF by February 1, 2027.
• To the IRS: file Copy A electronically through IRIS, or by mail if you are filing fewer than the electronic-filing threshold of returns, also by February 1, 2027.
• Keep Copy C for your own records for at least three years.

Missing the deadline triggers penalties that scale with how late you are, starting around $60 per form if you file within 30 days late and rising to over $340 per form if you never file at all, so it pays to prepare these as soon as your books are closed for the year rather than waiting until late January.

If you are only issuing one or two forms a year, there is little reason to pay for a full year of accounting software just for this task. Our One Week Plan is a $3 one-time purchase that gives you full access to fill, sign, and export as many PDFs as you need for seven days, then it simply expires with nothing to cancel. Compare that to a $10 or more monthly subscription you would need to remember to cancel after you are done with year-end paperwork.