1099 Forms in 2026: New Thresholds for Contractors and Payment Platforms
The 1099-NEC threshold rose to $2,000 and Form 1099-K returned to $20,000 and 200 transactions. What foreign-owned US companies must issue and receive in 2026.
Form 1099 is how the IRS learns about money paid to people who are not employees: contractors, landlords, and businesses paid through payment platforms. If your US company pays contractors, or receives money through PayPal, Stripe or a marketplace, the 1099 rules affect you on both sides.
The thresholds changed for payments made in 2026, following the 2025 tax law. This guide explains what changed and what foreign-owned companies need to do.
The two forms that matter most
- Form 1099-NEC reports payments a business makes to independent contractors for services.
- Form 1099-K reports payments a business receives through payment card networks and third-party payment platforms.
There are other 1099 variants (for rent, interest, royalties and more), but these two cover most small foreign-owned companies.
1099-NEC: payments to contractors
What changed: for payments made from January 1, 2026, a US business generally issues a 1099-NEC when it pays a US contractor $2,000 or more in a calendar year. The old threshold of $600 had been in place for decades. From 2027, the new threshold is adjusted for inflation.
Who gets one: US individuals and many US businesses that you pay for services, such as a US designer, developer, consultant or virtual assistant. Payments to corporations are generally exempt, with some exceptions (for example certain legal fees).
Who does not: foreign contractors working outside the USA. Instead of a 1099, you collect a Form W-8BEN (individuals) or W-8BEN-E (entities) to document that they are foreign. See W-8BEN vs W-8BEN-E vs W-9.
1099-K: payments received through platforms
What changed: after several years of planned reductions (to $5,000, then $2,500, then $600), the 2025 tax law restored the original threshold. A payment platform issues a 1099-K when a payee receives more than $20,000 across more than 200 transactions in a calendar year.
Payment card processors (card payments) report all amounts regardless of the threshold.
What it means for you: if your US company sells through PayPal, a marketplace or a similar platform and crosses the threshold, you will receive a 1099-K showing your gross payments. It is information for your tax filing; it does not by itself mean you owe tax. Your preparer reconciles it with your records.
The summary table
| Form | Who issues it | Threshold for 2026 | Due date for 2026 payments |
|---|---|---|---|
| 1099-NEC | Your company, to US contractors | $2,000 per contractor | February 1, 2027 (to recipients and the IRS) |
| 1099-K | Payment platforms, to you | Over $20,000 and over 200 transactions | Early 2027, issued to you |
| W-8BEN / W-8BEN-E | Foreign contractors, to your company | Collected before paying | Keep on file |
| W-9 | US contractors, to your company | Collected before paying | Keep on file |
The 1099-NEC deadline is normally January 31; because January 31, 2027 is a Sunday, it moves to the next business day. See our 2027 tax calendar.
What foreign-owned companies should do
- Collect paperwork before paying anyone. A W-9 from US contractors, a W-8BEN or W-8BEN-E from foreign ones. If a US contractor refuses to provide a W-9, backup withholding rules can apply.
- Track payments by contractor through the year. Paying contractors from your US business bank account makes this easy.
- Check who crosses $2,000. Only those US contractors need a 1099-NEC for 2026 payments.
- File on time. Late or missing 1099s carry penalties per form.
- Reconcile 1099-Ks you receive with your own sales records and platform reports.
Does this affect my LLC's own tax filing?
Indirectly. Payments to contractors are business expenses, and 1099-Ks you receive report income that should match your books. For a foreign-owned single-member LLC, your annual filing (Form 5472 with a pro forma 1120) focuses on transactions with you as the owner, but clean records of all income and expenses make every filing easier. See Form 5472 explained.
Common mistakes
- Issuing 1099s to foreign contractors (they need a W-8 on file instead).
- Paying US contractors without collecting a W-9 first.
- Paying contractors through personal accounts, which breaks the audit trail.
- Ignoring a 1099-K because "the LLC isn't taxable", when the income still has to be reported correctly.
How UCB helps
As part of our US tax filing service, we review your contractor payments, prepare and file the 1099-NECs you need, and reconcile any 1099-Ks you receive. We also send you the right W-9 and W-8 forms to collect before you pay anyone.
Paying US contractors or selling through platforms? WhatsApp us at +91 8105 199 399 or email info@ucbsolutions.com and we will make sure your 1099s are handled.
Let our experts handle it for you
Every business is different. Message us with your country, business type and goals, and we will recommend the right structure, state and package. We do the work; you focus on your business.
This article is general information for non-resident business owners and is not legal or tax advice. Rules and fees change; contact us to confirm what applies to your situation.
