Starting with payments made in 2026, the threshold for issuing Form 1099-NEC to independent contractors rises from $600 to $2,000, indexed for inflation in future years. The change, enacted under the One Big Beautiful Bill Act (OBBBA), reduces paperwork for small businesses.
Alert: The obligation to withhold backup withholding when a contractor fails to provide a valid TIN remains unchanged—regardless of the payment amount.
Tip: Update your accounts payable procedures accordingly.
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