IRS Proposes Raising 1099 Threshold to $2,000: Less Paperwork Could Be Coming
A rule that hadn’t changed since 1954 may be getting an update. The IRS has proposed eliminating the 1099 filing requirement for payments under $2,000, with the threshold rising with inflation every year going forward — if the rule is finalized.
The change would apply to payments made in 2026, so the filing reduction would show up when you file in early 2027. TY 2025 reporting is not affected.
The proposed regulations, if finalized, would implement the OBBBA’s increase to the section 6041 information reporting threshold from $600 to $2,000 for payments made after Dec. 31,
2025, indexed for inflation after 2026.
Where 1099 Threshold Applies
The new threshold applies to:
- Form 1099-MISC (Miscellaneous Information)
- Form 1099-NEC (Nonemployee Compensation)
- Form W-2 (Wage and Tax Statement)
- Form W-2G (Certain Gambling Winnings), and
- Backup-withholding triggers under section 3406.
The regulations were also published in IRB 2026-19 on May 4. The IRS estimates roughly 50 million fewer information returns will be filed in 2027 as a result. Payroll teams should not change current TY 2025 reporting (filed January 2026) — the threshold change is effective for payments made in 2026, filed in early 2027.
Comments and requests for a public hearing are due June 16, 2026.
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