Linchpin
Log inSign up

Guide

1099s for small businesses: what changed this year

If you paid a contractor this year, January is coming whether you're ready or not. The rule changed, and a lot of people still think it's $600. Here's the plain version so you know who needs a form and you're not chasing paperwork on January 30th.

The number went from $600 to $2,000

For payments made in 2026, you generally only need to send a 1099-NEC to a contractor you paid $2,000 or more for work during the year. For years it was $600. Starting in 2027 the number moves with inflation, so check it each year.

That means some people you sent a 1099 to last year may not need one this year. It also means you still have to add up what you paid each person to know which side of the line they're on.

Who usually gets one

  • Usually yes: individuals, sole proprietors and most LLCs you paid for work in your business. Think the handyman, the freelance designer, the guy who helps on big jobs.
  • Usually no: corporations (attorneys are a common exception), employees (they get a W-2), and anyone you paid by credit card or through a payment app like PayPal. Those card and app payments get reported by the payment company instead.

When it's due

The 1099-NEC goes to the contractor and to the IRS by January 31. When the 31st lands on a weekend it moves to the next business day. January 31, 2027 is a Sunday, so for 2026 payments the deadline is Monday, February 1, 2027.

That sounds like plenty of time. It isn't, once the holidays hit and you're waiting on someone to send you their info.

Get the W-9 before you pay

A W-9 is the form where a contractor gives you their legal name and tax ID. You need it to fill out the 1099. The easiest time to get one is before the first payment, while they want to get paid. The hardest time is late January, when they've moved on to other jobs and aren't answering texts.

A simple year-end routine:

  1. List everyone you paid for work this year.
  2. Add up what you paid each one, leaving out card and app payments.
  3. Mark who crossed $2,000.
  4. Check you have a W-9 for each of them. Ask now for any you don't.
  5. File and send the forms by the deadline.

Where Linchpin fits

Linchpin is a simple website that hosts the tools a small business needs. You turn on only the modules you use. I built it because friends and family kept asking me for the same few tools.

The Contractor & 1099 Management module is $15 a month. It keeps the routine above in one place:

  • Keep a list of your contractors and log what you pay them
  • See who has crossed $2,000 for the year
  • Request W-9s by email, with reminders if they don't answer
  • If you file through Track1099, send it your totals when it's time

It's tracking and prep for your records, not tax advice and not the filing itself. No card to start.

Start with Contractors

FAQ

I paid someone $1,500 in 2026. Do I send them a 1099?

Generally no, since that's under $2,000. They still owe tax on the money. You just don't have to send the form.

Do I need a 1099 if I paid through PayPal, Venmo for business or a credit card?

Usually not. Card and payment app transactions are reported by the payment company, so you leave them out of your own 1099 totals.

What if a contractor won't send me a W-9?

Ask early and in writing, and keep a record that you asked. If you still can't get one, talk to your tax person about what to do next. There are rules for it.

How much does the Linchpin Contractors module cost?

$15 a month. You only pay for the modules you turn on. 3+ modules get 10% off, 5+ get 15% off.

This is a plain-English overview, not tax advice. The rules have exceptions, so check with your tax person if you're not sure about a specific payment.