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OBBBA Updates

Starting with 2026 payments reported in 2027, the Form 1099-NEC reporting threshold for nonemployee compensation increases from $600 to $2,000. Backup withholding must still be reported on Form 1099-NEC even when the payment is below the normal reporting threshold. Also, note that Form 1099-NEC e-filing for tax year 2026 will be handled through IRIS, as FIRE is being retired for the 2027 filing season.

How to file 1099-NEC electronically?

It is mandatory for filers with 10 or more information returns in total to file electronically, unless they obtain a hardship waiver. For tax year 2026 (filed in 2027), the IRIS is replacing FIRE. It will be the only IRS intake system for Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G. This means FIRE will not be available for current and prior-year submissions, as well as corrections, after its shutdown.

1099-NEC eFiling Solution Designed for All

Tax1099 caters to your tax compliance needs with ease. We cover Federal and State e-filing, recipient copy distribution, and offer efficient features like bulk filing, internal audits, secure online tax form access, postal mailing services, seamless software integrations, and more.

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Key Features Tax1099 Platform
Filing Options Supports electronic filing of Form 1099-NEC with both the IRS and state agencies
Recipient Copy Delivery Choose between sending Form 1099-NEC copies via postal mail or secure online access.
IRS Notice Management Streamline handling of IRS notices and communications for enhanced compliance.
Free TIN Match Verify Taxpayer Identification Numbers (TINs) to ensure accurate filing.
Supporting Services Access, download, and print PDF copies of your forms, available 24/7 from anywhere.

What is a 1099-NEC form used for?

If you made payments of $600 or more in 2025 to nonemployees for services performed during your trade or business, you may need to file Form 1099-NEC in 2026. However, due to the passage of OBBBA, the 1099-NEC reporting threshold for 2026 payments (2027 filing season) increases to $2,000 or more for nonemployee compensation. If backup withholding applies, report the backup withholding and the payment on Form 1099-NEC even if the payment is below the reporting threshold.

Form 1099-NEC is specifically for reporting nonemployee compensation, such as service payments to independent contractors, freelancers, gig workers, and attorney service fees, when the threshold is met.

It does not cover rents, royalties, medical and health care payments, fishing boat proceeds, crop insurance proceeds, or attorney gross proceeds. Those payment types are generally reported on Form 1099-MISC, when applicable.

Do late filings of 1099-NEC incur IRS penalties?

The IRS enforces penalties for failure to file Form 1099-NEC and other form types on time. These penalties can be incurred even if the payer does not provide copies to recipients by the specified deadline or submits incomplete or inaccurate statements.

Charges for Each Information Return or Payee Statement

Year Due Up to 30 Days Late 31 Days Late Through August 1 After August 1 or Not Filed Intentional Disregard
2026 $60 $130 $340 $680
2025 $60 $120 $310 $630
2024 $50 $110 $290 $580
2022 $50 $110 $280 $570
2021 $50 $110 $280 $560
2020 $50 $110 $270 $560
2019 $50 $100 $270 $540
2018 $50 $100 $260 $530
2017 $50 $100 $260 $520
2016 $50 $100 $260 $520
2011-2015 $30 $60 $100 $250

Penalties range from $60 to $340 per return. As shown in the table above, penalties have increased each year for over a decade.

File your 1099-NEC Electronically with Tax1099

  • Step 1: Enter Federal & State Tax Information
  • Step 2: Verify Your Tax Data for Accuracy
  • Step 3: Easily Submit Your Returns
  • Step 4: Instantly Deliver Recipient Copies

Our experts will keep you informed with IRS updates as you go through the filing procedure! So, start eFiling your Form 1099-NEC using Tax1099 today.