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Farms and agricultural businesses work with contractors for a range of services. Each one of these contractors can require a different Form 1099. Tax1099 helps agricultural businesses file the right one for each and makes the process easier with W-9 collection, TIN verification, form preparation, and eFiling.
Farms and agricultural companies usually hire contractual workers and service providers to handle harvesting, spraying, planting, field operations, equipment repair, and veterinary care. When the workers in question are properly classified as independent contractors, the payments they receive for their services have to be reported in accordance with the 1099 rules.
The following information can help farmers, ranchers, and agricultural businesses prepare for the 2026 tax year reporting.
A farm that operates as a business is subject to the same reporting rules as other types of businesses.
Most farms have to complete Form 1099-NEC for service providers who are not employed full-time. The question of whether or not a payment requires a 1099 depends on:
Just because a payment has been made to a nonemployee or a vendor does not mean that it has to be reported on a Form 1099.
Form 1099-NEC is used to report payments of $2,000 or more to nonemployees who provide services but are not farm employees, such as:
The One Big Beautiful Bill Act (OBBBA) has increased the reporting threshold for a number of qualifying Form 1099 payments, including nonemployee compensation reported in 1099-NEC. Payments made in 2026 have to be reported if the amount is $2,000 or more.
Agricultural businesses should ensure that payments meet the new 1099-NEC threshold during year-end vendor reviews. The change doesn't apply evenly across every 1099 form, though. Some Form 1099-MISC payments and other information returns kept their original thresholds, which is why it helps to check each payment type individually.
How a payment is reported depends on the type of work, tax classification, amount paid, and who carried it out.
It is necessary for a farm to first classify the payment before filing, as this will determine the correct 1099 for agricultural services.
Form 1099-NEC
Form 1099-NEC is used to report services provided by non-employees. For the 2026 tax year, any qualifying nonemployee compensation of $2,000 or more should be entered in Box 1a. For farms, this includes custom farming, harvesting, spraying, machinery repair, and consulting.
Form 1099-MISC
Form 1099-MISC covers a different set of payments:
Farms often employ harvesting crews whenever they lack the appropriate equipment or when they need more labor. The obligation to issue custom harvesting operators 1099 forms usually arises during harvesting seasons.
If the person who is harvesting works as an independent contractor, the farm will file Form 1099-NEC when the payment reaches the minimum reporting threshold.
Crop spraying and custom fieldwork follow the same reporting obligation covered by Form 1099-NEC. A 1099 for spraying services usually includes herbicide application, pesticide spraying, fertilizer application, custom planting, soil preparation, field mowing, and custom tillage.
The IRS has long regarded this type of work as a service payment, reportable on a 1099-NEC, and applied the same $2,000 threshold to it.
Repair work is also a common reason for filing Form 1099-NEC. The act of hiring an independent technician rather than an employee falls under 1099-NEC reporting requirements. Repairs to tractors, irrigation systems, grain-handling equipment, field machinery, etc., are all examples of reportable equipment repair payments.
If the payment is mainly for labor and meets the $2,000 threshold, Form 1099-NEC reporting is required. It gets more complicated when a repair shop also sells parts in addition to services. When parts and materials are provided as part of the contractor's repair service, those amounts can also be included in the reportable service payment.
Whether a veterinary payment goes on Form 1099-MISC or Form 1099-NEC depends on the type of service. Payment for medical or health care services, such as treating livestock, is reported in Box 6 on Form 1099-MISC. Non-medical work, such as consulting outside clinical care, goes on Form 1099-NEC.
This is an important distinction for most cattle operations, dairy farms, horse farms, poultry businesses, hog operations, and other livestock businesses.
Corporate vendors are usually exempt from Form 1099 reporting, but veterinary and other medical payments are an exception, even for an incorporated clinic.
Form 1099-MISC and Form 1099-NEC share the same $2,000 threshold for the 2026 tax year. That threshold decides whether a payment gets reported at all, not which form to use.
Rental payments for farmland, pasture, barns, storage facilities, and other buildings or property are reported on Form 1099-MISC.
Qualifying rent payments generally go on Form 1099-MISC, Box 1. For most rent payments made in 2026, the federal reporting threshold is $2,000 or more.
Agricultural businesses buy a large volume of products every year. Purchasing products and goods alone is not reportable on Form 1099-NEC. Buying seed, feed, fertilizer, fuel, chemicals, farm supplies, equipment, packaging, etc., is not treated the same as payments for services.
The distinction gets trickier when a single vendor sells both products and labor, which is why separating the service portion of a mixed invoice is important for accurate 1099 reporting in farming.
The way you pay contractors can determine which 1099 form to use. If you use a credit card or a third-party service, the company handling the payment is the one that usually files Form 1099-K, not you.
For 2026, the 1099-K reporting limit for third-party settlement organizations is $20,000 in total payments and more than 200 transactions
When Form 1099-K applies, the farm usually does not file Form 1099-NEC or Form 1099-MISC for the same payment.
A farm may work with dozens or even hundreds of vendors each year, making manual 1099 reporting hard to manage. With Tax1099, farms and agricultural businesses can make 1099 reporting easier to manage and meet reporting requirements.
Farmers need to send a Form 1099 when they pay a contractor $2,000 or more for that year. This usually applies to independent workers hired for jobs like harvesting, spraying, or repairs.
The 1099-NEC threshold for 2026 is $2,000 for qualifying nonemployee compensation.
Custom harvesting payments require 1099 reporting once the total paid to a reportable contractor reaches $2,000 for the year.
Crop-spraying services fall under 1099 reporting when qualifying contractor payments reach $2,000.
If you pay a contractor with a credit card, the farm usually doesn't need to file a Form 1099-NEC or Form 1099-MISC for that payment. Instead, the company that processes the card payment handles the reporting via Form 1099-K.
No. Some payment categories use different thresholds. Royalties remain reportable at $10 or more, while gross proceeds paid to attorneys remain reportable at $600 or more.
File Form 1099-NEC and Form 1099-MISC for your farm's contractors and vendors, all from one Tax1099 account.