One of President Trump’s often-stated goals is reducing regulations. One of the provisions of his Big, Beautiful Bill will affect a large number of Americans beginning January 1, 2026. (To be reported in 2027, of course.)
The changes will concern 1099 forms, of which there are three basic types:
- 1099 – NEC: This involves payments made to independent contractors, freelancers, gig workers, and professional service providers. Say, for instance, you hire someone to do landscaping work in your yard, or hire an accountant to do your taxes – these are two examples of a non-employee you pay.
The current threshold is $600, meaning if you paid someone $599, or less, in a calendar year, you did not have to file a 1099-NEC for them. If you paid $600 or more, you were required to file the 1099. Beginning in 2026, that threshold will be $2000, and it must be filed by January 31 of each year. - 1099-K: This involves payments you make for rents, prizes, royalties, and certain other payments. Like the NEC threshold, this was previously $600, but is now changed to $2000.
- 1099-K: This concerns gross payments you make via credit cards, debit cards, or online payment platforms (like PayPal or Venmo) to a business or individual. These transactions previously required a payment processor to file a 1099-K on you if your annual transactions were $20,000 or 200 transactions. Under Joe Biden’s American Rescue Plan Act of 2021, that amount was lowered to $600. Trump’s Big, Beautiful Bill not only returns that amount to $20,000, but makes it retroactive to January 2025. In other words, if you receive payments via a third-party network (goods/services) but your annual amount is less than $20,000 or you have fewer than 200 separate transactions, you won’t receive a 1099-K under the new law.
These changes brought about by the ONE BIG BEAUTIFUL BILL will reduce paperwork/reporting burden for many small sellers, gig-workers, hobbyists who have lower volumes.
Important: These reporting thresholds adjust when a payment is business income (for goods/services) and when using payment platforms; the form doesn’t determine what is taxable — you still must report taxable income regardless of whether a form is issued.
