- New for 2026 payments: a 1099-NEC is required when you pay someone $2,000 or more for services in the year. It used to be $600.
- Deadline: to your subs and to the IRS by Monday, February 1, 2027 (January 31 falls on a Sunday).
- Get the W-9 before the first payment, not in January.
- No taxpayer ID generally means withholding 24% of what you pay that sub.
- A W-9 can carry a Social Security number. Store it like one.
What changed for 2026
For decades, the line was $600: pay a contractor that much for services in a year and you sent them a 1099. The 2025 federal tax law raised it. The IRS instructions for Forms 1099-MISC and 1099-NEC now use $2,000 for payments made in 2026, and the amount will be adjusted for inflation from 2027.
| Payments made in | Report on 1099-NEC when the year's total is | Forms due |
|---|---|---|
| 2025 | $600 or more | February 2, 2026 |
| 2026 | $2,000 or more | February 1, 2027 |
| 2027 and later | $2,000, adjusted for inflation | January 31, or the next business day |
The threshold is a total for the year per sub, not per job or per invoice. A sub you paid $1,500 in March and $1,500 in August gets a 1099-NEC for 2026.
The W-9 itself hasn't changed. A higher threshold means fewer 1099s, not fewer W-9s. You still don't know in March who will cross $2,000 by December, so collect a W-9 from every sub.
Which subs get a 1099-NEC
Generally, you send a 1099-NEC to a sub you paid $2,000 or more during the year for services in the course of your business. In practice:
Usually yes
- Sole proprietors, including those working under a trade name.
- Single-member LLCs taxed as sole proprietorships. The 1099 goes under the owner's name and number, as the W-9 shows.
- Partnerships, and LLCs taxed as partnerships.
- Payments for labor and materials together, when the materials are part of the service. The IRS instructions include "parts or materials used to perform the services."
Usually no
- Corporations, both C and S, and LLCs taxed as one. The big exception is attorneys, whose fees are reported even when their firm is a corporation.
- Payments by credit card or payment card. The card processor reports those on Form 1099-K, so you don't report them on a 1099-NEC.
- Payments for merchandise only, such as a supplier selling you materials with no service attached.
The W-9 is how you tell these apart: line 3a shows the sub's federal tax classification. That's one more reason to collect it from every sub, corporations included.
When to collect it: before the first payment
The best time to get a W-9 is the same moment you get the certificate of insurance, before the sub starts work. Three reasons:
- You have leverage. Before the first check, a sub has every reason to send it. In January, after the last check cleared, they don't.
- Backup withholding. If a sub doesn't give you a taxpayer identification number, the IRS generally requires you to withhold 24% of reportable payments and send it in. You want the number in hand before you pay, not after.
- January is already full. The 1099 deadline lands weeks after year-end close. Chasing missing W-9s then is the part that makes it miserable.
What to check on every W-9
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It's the current form
As of this writing, the current Form W-9 is the March 2024 revision; the revision date is printed in the top left corner. Send subs the blank form from irs.gov rather than an old copy from your files.
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Line 1: the name on their tax return
For a sole proprietor, that's the owner's own name, with any business or trade name on line 2. For a corporation, partnership or LLC taxed as one, it's the entity's legal name. It should match the name you'll put on the 1099.
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Line 3a: tax classification
Exactly one box checked. If it's "LLC," the letter next to it (C, S or P) says how the LLC is taxed, which decides whether it gets a 1099-NEC.
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Line 4: exemptions
Most subs leave this blank. A code here claims an exemption from backup withholding or from certain reporting. If one is filled in and it doesn't fit what you know about the sub, ask.
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Part I: the taxpayer ID
A Social Security number or an employer identification number (EIN), matching the name on line 1. A single-member LLC owned by a person gives the owner's number.
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Part II: signed and dated
An unsigned W-9 is only half a W-9. The signature certifies the number is correct.
Check the names and numbers before January
The IRS runs a free TIN Matching service through its e-Services site that checks a name and taxpayer ID against IRS records before you file (see Publication 2108-A). A mismatch caught in November is an email to the sub. A mismatch caught by the IRS after you file is a notice, and possibly backup withholding.
Keep W-9s safe
A W-9 from a sole proprietor carries their Social Security number. Treat the file accordingly:
- Don't let it live in email. Save it to one restricted folder and delete the attachment.
- Limit who can open it. The project manager checking insurance doesn't need to see the sub's SSN. Whoever prepares 1099s does.
- Don't pass it around. Share the sub's name and classification, not the form.
- Decide how long to keep it, with your accountant, and review old ones on a schedule rather than keeping them forever.
The 1099 timeline for 2026 payments
List every sub you've paid this year. Request a W-9 from anyone missing one, and run the numbers through TIN Matching.
Total each sub's 2026 payments, leave out card payments, and mark everyone at $2,000 or more.
Furnish each sub their copy and file with the IRS. If you file 10 or more information returns in total, you must file electronically, for example through the IRS's free IRIS portal or your accounting software.
Collect the W-9 with the certificate
With Kautus, each sub gets a secure upload link, with no account to create, for their certificate of insurance, their W-9 and their other documents. W-9s are kept in restricted storage, opened only when someone clicks to view one, and never read by AI. Your dashboard flags every sub with no W-9 on file, so the gaps are visible long before January.
Kautus opens January 1, 2027, with a free trial and no card required.
Register for launchCommon questions
Is the $2,000 threshold per job or per year?
Per year: the total you paid that sub for services during the calendar year.
Do I send the W-9 to the IRS?
No. You keep the W-9. The IRS gets the information through the 1099 you file.
Should I get a W-9 from a sub that's a corporation?
Yes. Corporations usually don't get a 1099-NEC, and the W-9 is how you know the sub is one.
What if I paid a sub by credit card?
Card payments are reported by the card processor on Form 1099-K, so they're left out of the 1099-NEC. Payments by check, ACH or wire are the ones you count.
What if a sub refuses to send a W-9?
Without a taxpayer ID, you're generally required to withhold 24% of reportable payments as backup withholding. Most subs send the form quickly once they hear that. Talk to your accountant before you start withholding.
Related guides
This guide is general information for general contractors, not tax or legal advice, and reflects IRS rules as of October 2026. Rules and forms change; check the current Instructions for Forms 1099-MISC and 1099-NEC, Form W-9 and backup withholding pages on irs.gov, and talk to your accountant about your own situation.