Two different 1099 thresholds changed under the One Big Beautiful Bill Act, and they are easy to mix up. One change raised the bar for the forms businesses send to contractors (1099-NEC and 1099-MISC). The other change killed the $600 rule for payment apps and marketplaces (1099-K) before it ever took effect, restoring the old $20,000 standard. This page puts every current threshold in one matrix - federal and state - so you can see exactly which form shows up at which dollar amount in 2026.
For 2026 payments, Form 1099-NEC and 1099-MISC reporting starts at $2,000 per payee, Form 1099-K from payment platforms starts at more than $20,000 AND more than 200 transactions, and several states still force 1099-K reporting at far lower amounts.
OBBBA §70433 raised the reporting trigger under IRC §6041(a) and §6041A from $600 to $2,000 for payments made after December 31, 2025, with annual inflation indexing starting with 2027 payments under new IRC §6041(h). That is the 1099-NEC and 1099-MISC change - it covers direct payments your business makes to contractors, landlords, and other payees.
OBBBA §70432 is a different provision for a different form. It amended IRC §6050W(e) to restore the 1099-K threshold to more than $20,000 in gross payments AND more than 200 transactions per payee, retroactive as if it had been part of the American Rescue Plan Act. The ARPA $600 rule never took effect and is now permanently repealed.
| Form | Tax Year 2024 | Tax Year 2025 | Tax Year 2026 | Authority |
|---|---|---|---|---|
| 1099-NEC (nonemployee compensation) | $600 | $600 | $2,000 (indexed from 2027) | OBBBA §70433; IRC §6041(a), §6041A, §6041(h) |
| 1099-MISC (rents, prizes, other §6041 payments) | $600 | $600 | $2,000 (indexed from 2027) | OBBBA §70433; IRC §6041(a) |
| 1099-K (payment apps, marketplaces) | $5,000 (IRS phase-in, Notice 2024-85) | Over $20,000 AND over 200 transactions (OBBBA, retroactive) | Over $20,000 AND over 200 transactions (permanent) | OBBBA §70432; IRC §6050W(e) |
| 1099-INT / 1099-DIV / 1099-G / 1099-R / royalties | $10 | $10 | $10 (unchanged) | IRC §6049, §6042, §6050N |
| 1099-B (broker proceeds) | All amounts | All amounts | All amounts (unchanged) | IRC §6045 |
| 1099-S (real estate) / 1099-C (debt cancellation) | $600 | $600 | $600 (unchanged by OBBBA) | IRC §6045(e), §6050P |
ARPA dropped the 1099-K threshold to $600 in 2021. The IRS delayed it three times, then set a $5,000 enforcement floor for 2024 and planned $2,500 for 2025 with $600 to follow. OBBBA, signed July 4, 2025, repealed all of that retroactively. The IRS confirmed in Fact Sheet 2025-08 (October 23, 2025) and refreshed its 1099-K FAQs to remove every reference to the ARPA thresholds. The $20,000/200 standard applies to 2025 transactions and every year after, with no sunset.
Backup withholding under IRC §3406 stays at 24%. For 2026 payments, the obligation for service payments tracks the new $2,000 reporting threshold: collect Form W-9 before the first payment, because you cannot predict in January whether a contractor will cross $2,000 by December. Treasury issued proposed regulations in January 2026 conforming the §3406 rules for payment platforms to the restored §6050W(e) threshold; those rules are proposed, not final.
The federal rollback did not erase state rules. These states require 1099-K reporting below the federal threshold, so a platform can be required to file with the state (and send you a copy) even when no federal form is due:
| State | 1099-K Threshold |
|---|---|
| Arkansas | $2,500 (when no Arkansas tax withheld) |
| District of Columbia | $600 |
| Illinois | $1,000 AND 4 or more transactions |
| Maryland | $600 |
| Massachusetts | $600 |
| Missouri | $1,200 |
| New Jersey | $1,000 |
| Vermont | $600 |
| Virginia | $600 |
Montana and North Carolina have state-level direct filing rules that some preparers read as lower 1099-K thresholds; confirm with the state revenue department before relying on either. State rules in this area change frequently - check the state authority before each filing season.
States do not automatically follow the new federal $2,000 trigger. California adopted the $2,000 threshold for 1099-NEC and 1099-MISC beginning with tax year 2026, while states that wrote $600 into their own statutes or guidance - Mississippi and Wisconsin are current examples - remain at $600 until they amend. If you file in multiple states, run the state list before assuming the federal threshold controls.