Do I need to send a 1099 to my contractor? A small-landlord guide for 2026 payments
Short answer: If your rental is a trade or business and you paid one unincorporated contractor $2,000 or more for services in 2026, by check, cash or bank transfer, you generally file Form 1099-NEC and send the contractor a copy by Monday, February 1, 2027.
The threshold was $600 for payments made before 2026 (IRS). Card and payment-app payments go on Form 1099-K, which the payment company files, not you. Payments to most corporations are exempt, but payments to attorneys are not.
What changed for 2026 payments: $600 became $2,000
The IRS's page "Am I required to file a Form 1099 or other information return?" says: "For payments made before 2026, the reporting threshold is $600. For payments made in 2026, the reporting threshold is $2,000. For payments made after 2026, see Pub. 1099 for the inflation-adjusted reporting threshold."
The 2026 Instructions for Forms 1099-MISC and 1099-NEC and Publication 1099 (2026) say the same thing: for tax years beginning after 2025 the minimum threshold rose to $2,000 and will be adjusted for inflation starting with calendar year 2027. The IRS ties the increase to the July 4, 2025 tax law, Public Law 119-21, which IRS.gov now calls the Working Families Tax Cuts (widely known as the One Big Beautiful Bill Act).
| Payment (made in the course of your trade or business) | Form | 2026 threshold |
|---|---|---|
| Services by someone who isn't your employee, including parts and materials (plumber, painter, handyman, cleaner, landscaper, bookkeeper) | 1099-NEC, box 1a | $2,000 |
| Attorney's fees for legal services (law firm or other legal-services provider, even if incorporated) | 1099-NEC, box 1a | $2,000 |
| Rents you pay (for example, office or storage space, equipment rental) | 1099-MISC, box 1 | $2,000 |
| Gross proceeds paid to an attorney that aren't for the attorney's services (for example, a settlement paid through a lawyer) | 1099-MISC, box 10 | $600 |
| Payments by credit card, debit card or a payment app / third-party network | 1099-K (filed by the payment company) | Not on your 1099-NEC/MISC |
Sources: Instructions for Forms 1099-MISC and 1099-NEC (Rev. 12/2026), specific instructions for each form and box; Pub. 1099 (2026) Guide to Information Returns. Note the attorney gross-proceeds box stays at $600 in both.
Who counts: the IRS four-part test for 1099-NEC
The 1099-NEC box 1a instructions say you must generally report a payment as nonemployee compensation if all four are true:
- You paid someone who is not your employee.
- You paid for services in the course of your trade or business.
- You paid an individual, partnership, estate, or, in some cases, a corporation.
- Your payments to that payee totaled at least $2,000 during the year.
The total is per payee for the whole calendar year, so three $800 jobs from the same painter add up to $2,400. Parts and materials the contractor supplied as part of the service count toward the total. Payments "for merchandise, telegrams, telephone, freight, storage, and similar items" are listed as exceptions, so buying supplies at a hardware store isn't a 1099 payment.
Worker classification is a separate question. If you control what will be done and how it will be done, the worker may be your employee (Form W-2), not a contractor. See the IRS page Independent contractor (self-employed) or employee?
Corporations: usually exempt, attorneys are not
Per the instructions, you generally don't file 1099-NEC or 1099-MISC for payments to a corporation, "including an LLC that is treated as a C or S corporation." The IRS's overview page puts it as: no filing if "the payment was made to another business that is incorporated, and the payment is not for medical or legal services."
- Attorneys: "The exemption from reporting payments made to corporations does not apply to payments for legal services." An eviction lawyer's $2,000+ fee goes on 1099-NEC even if the firm is a PC or corporation. "Attorney" includes a law firm or other provider of legal services.
- Single-member LLCs that are disregarded entities are not corporations. Pub. 1099 tells you to report the owner's name and TIN. The contractor's W-9 shows how the LLC is taxed.
Property managers and agents
Payments of rent to a real estate agent or property manager are an exception: the person paying the rent doesn't report them. Instead, "the real estate agent or property manager must use Form 1099-MISC to report the rent paid over to the property owner" (instructions, Exceptions). If a manager pays your contractors from your funds, ask them who files the 1099s. The instructions treat whoever performs "management or oversight functions" over a payment as the payor for reporting purposes.
Is your rental a "trade or business"? What the IRS actually says
The instructions say: "Report on Form 1099-MISC or Form 1099-NEC only when payments are made in the course of your trade or business. Personal payments are not reportable. You are engaged in a trade or business if you operate for gain or profit." The IRS overview page also lists "You are not engaged in a trade or business" as a reason you aren't required to file.
IRS.gov does not give a bright-line rule such as "one rental unit doesn't count." Whether your rental is a trade or business depends on your facts, so this is a question for your tax professional. Two related things to know:
- Schedule E, Line A asks whether you made any payments during the year that would require you to file any Forms 1099 (Schedule E instructions). Your preparer will need your answer. For the expense lines themselves, see our Schedule E expense lines guide.
- Repairs on your own home are personal payments, not reportable. Only rental-related payments matter here.
Collect a W-9 before you pay
Form W-9 is how a contractor gives you their correct taxpayer identification number (SSN or EIN) for an information return. Ask for it when you hire, not in January. The W-9 also tells you whether the vendor is a corporation, which helps you sort out who needs a 1099.
- If a payee doesn't give you a TIN, reportable payments may be subject to backup withholding at 24% (Pub. 1099, part N). You then file a 1099 for any amount withheld, regardless of the payment size.
- Attorneys must promptly supply their TIN, whether incorporated or not (instructions).
- Keep the W-9 in your records. The form itself says not to send it to the IRS.
Card and payment-app payments go on 1099-K, not your 1099-NEC
From the 2026 instructions: "Payments made with a credit card or payment card and certain other types of payments, including third-party network transactions, must be reported on Form 1099-K by the payment settlement entity under section 6050W and are not subject to reporting on Form 1099-MISC or Form 1099-NEC."
So when you add up what you paid a contractor, leave out the amounts you paid by card or through a payment app or network. Count checks, cash, ACH and bank transfers. If you're not sure whether a particular app payment counts as a card or third-party network transaction, keep the receipt and ask your preparer. The IRS's Form 1099-K page explains the payment-company side.
1099-NEC vs 1099-MISC for landlords
- 1099-NEC: services by non-employees and attorney's fees ($2,000+ in 2026).
- 1099-MISC: rents you pay ($2,000+), other income such as prizes and awards ($2,000+), and gross proceeds paid to an attorney that aren't for the attorney's services, such as a settlement routed through a lawyer ($600+). The instructions say payments "more appropriately described as rent" go on 1099-MISC, not 1099-NEC.
- Equipment with an operator: if you rent a machine together with someone to run it, the instructions say to split the payment, with the machine rental on 1099-MISC box 1 and the operator's charge on 1099-NEC box 1a.
Deadlines for 2026 payments
| Form | Rule (IRS instructions) | Date for 2026 payments |
|---|---|---|
| 1099-NEC: copy to contractor and file with IRS | January 31 | Mon, Feb 1, 2027 (Jan 31 is a Sunday) |
| 1099-MISC: copy to recipient | January 31 (Feb 15 if amounts are in box 8 or 10) | Mon, Feb 1, 2027 for box 1 and box 3 amounts |
| 1099-MISC: file with IRS on paper | February 28 | Mon, Mar 1, 2027 (Feb 28 is a Sunday) |
| 1099-MISC: file with IRS electronically | March 31 | Wed, Mar 31, 2027 |
Weekend/holiday rule: "If any date shown falls on a Saturday, Sunday, or legal holiday in the District of Columbia or where the return is to be filed, the due date is the next business day" (Instructions, Filing dates; Pub. 1099). The 2027 dates above apply that rule to the January 31 / February 28 / March 31 deadlines. For box 10 gross proceeds, see the Feb 15 rule in Pub. 1099.
E-filing: if you have 10 or more information returns in total (counting W-2s and all 1099 types together), you must file electronically. The IRS's free IRIS portal is one option. With fewer than 10 you can file on paper or electronically. See Pub. 1099 for which paper copies the IRS accepts.
A quick year-end routine for a 1–10 unit landlord
- List every vendor you paid for rental work in 2026, with the payment method for each payment.
- Drop card and payment-app payments (1099-K side), supplies/merchandise, and payments for your own home.
- Total the rest per vendor. Flag anyone at $2,000 or more (or $600 or more for attorney gross proceeds).
- Check the W-9: is the vendor a corporation? If so, skip it unless it's an attorney/legal services.
- Chase missing W-9s now, before January.
- File and furnish 1099-NECs by Feb 1, 2027, and give your preparer the list for Schedule E, Line A.
Want a head start? The free Year-End Landlord Ops Checklist includes a 1099/CPA packing list.
Do the tally in a spreadsheet instead of on a napkin.
Kitwright's Year-End CPA & 1099 Kit is a $12 Excel workbook (also opens in Google Sheets and LibreOffice, no macros). It has a vendor/W-9 register (last 4 digits only), a per-vendor 1099 tally that leaves out card/app payments and compares each total to a threshold you set, a filing-deadline checklist, a per-property document checklist, and a one-page summary for your CPA. It's an organizing aid. It doesn't decide whether you must file and doesn't file anything for you.
See the CPA & 1099 Kit on Gumroad ($12)
More about the kit: kit overview page.
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FAQ
What is the 1099-NEC threshold for payments made in 2026?
$2,000. The IRS says: for payments made before 2026 the reporting threshold is $600; for payments made in 2026 it is $2,000; for payments made after 2026, see Publication 1099 for the inflation-adjusted amount.
When are 2026 Forms 1099-NEC due?
Form 1099-NEC must be furnished to the contractor and filed with the IRS by January 31. January 31, 2027 is a Sunday, and the IRS moves due dates that fall on a weekend or legal holiday to the next business day, so the date for 2026 payments is Monday, February 1, 2027.
Do I send a 1099-NEC to a contractor that is a corporation?
Generally no. The 1099-MISC/NEC instructions exempt most payments to a corporation, including an LLC taxed as a C or S corporation. The big exception for landlords is legal services: fees paid to an attorney or law firm are reportable even if it is incorporated.
I paid my handyman with a credit card or a payment app. Do I send a 1099-NEC?
Per the IRS instructions, payments made by credit card or payment card and third-party network transactions are reported on Form 1099-K by the payment settlement entity and are not subject to reporting on Form 1099-MISC or 1099-NEC.
Does every landlord have to file 1099s?
The IRS says to report on Form 1099-NEC or 1099-MISC only when payments are made in the course of your trade or business; personal payments are not reportable. Whether a particular rental counts as a trade or business depends on your facts, and IRS.gov does not give a simple unit-count rule. Ask your tax professional.
Should I get a W-9 before I pay a contractor?
It is the easy time to do it. Form W-9 is how a payee gives you their taxpayer identification number for information returns. If a payee fails to provide a TIN, reportable payments can be subject to backup withholding at 24% under Publication 1099.
Is this tax advice?
No. This is general educational information summarized from IRS.gov pages as of November 9, 2026. Your facts matter. Confirm with the IRS instructions or a tax professional before you file or skip a 1099.
Sources (all IRS.gov)
- IRS, Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026): thresholds, trade-or-business rule, Form 1099-K exception, corporation and attorney rules, filing dates, box-by-box instructions (PDF)
- IRS, Publication 1099 (2026), General Instructions for Certain Information Returns: $2,000 threshold and inflation adjustment from 2027, Guide to Information Returns, weekend/holiday rule, backup withholding (part N), payee names/TINs
- IRS, Am I required to file a Form 1099 or other information return?: "$600 before 2026 / $2,000 in 2026" note; when you're not required to file; 10-return e-file rule
- IRS FAQ, Form 1099-NEC and independent contractors: "$600 ($2,000 for payments made after December 31, 2025)"
- IRS, Payroll professionals tax center: threshold increase for payments made after Dec. 31, 2025; P.L. 119-21 signed July 4, 2025
- IRS, About Form W-9
- IRS, Understanding your Form 1099-K
- IRS, Independent contractor (self-employed) or employee?
- IRS, Instructions for Schedule E (Form 1040): Line A (Forms 1099 question)
- IRS, Information Returns Intake System (IRIS)
Also from Kitwright: Schedule E expense lines 5–19 explained (what goes on which line), free security deposit deduction calculator and state deposit guides (linked from the calculator).