Don’t Miss It: What You Need to Know for the 1099-NEC Deadline (2026)

If you pay $600 or more to freelancers, consultants, or independent contractors, you must file Form 1099-NEC. It’s how the IRS matches what you paid with what your contractors report. The deadline is strict, and for the 2026 season (covering 2025 payments), it lands on the next business day because January 31 falls on a weekend. So, your real cutoff is Monday, February 2, 2026, for both the IRS and recipient copies.

Why the deadline matters

Missing or messy filings create three very real problems:

• Money: Penalties start as soon as you are late and rise in tiers (details below).
• People: Your contractors cannot file accurately without their forms, which slows their own taxes.
• Notices: If your forms have name/TIN mismatches (or a missing TIN), the IRS can send CP2100/CP2100A notices that kick off B-notice steps and possible backup withholding. (These are about TIN/name errors, not lateness itself.)

2026 filing dates (for 2025 payments)

Copy to contractors: February 2, 2026 (next business day).

Copy to the IRS (paper or e-file): February 2, 2026 (same date — no later e-file window).

Quick state reminder (CA vs. PA & NJ)

California: If you file federally through the Combined Federal/State Filing (CF/SF) program and the amounts match, you typically don’t file a separate 1099-NEC with the FTB — the IRS forwards it. (Direct file only if your state data differs.)

Pennsylvania: File directly with the state (separate from federal CF/SF), and you must submit W-2 and 1099s directly to the state via myPATH.

New Jersey: You must e-file all W-2s and 1099s. Paper isn’t accepted.

Can you get an extension?

There is no automatic 30-day extension for 1099-NEC. If you truly need more time, submit Form 8809 by the due date (Feb 2, 2026) and state your reason (e.g., disaster, system failure, serious illness). In limited cases, a second 30-day extension may be granted for hardship.

E-file rule (10-return threshold)

If you file 10 or more total information returns (counting all types together — W-2s, any 1099s, etc.), you must e-file.

Penalties for missing the deadline (returns due in 2026)

For late or incorrect filings, the IRS uses tiered penalties (and small businesses — average gross receipts ≤ $5M — have lower caps):

• Up to 30 days late: $60 per return; cap $239,000 (small business).
• >30 days late but by August 1: $130 per return; cap $683,000 (small business).
• After August 1 or not filed: $340 per return; cap $1,366,000 (small business).
• In case of intentional disregard: $680 per return; no cap.

Example: If you file 100 forms about two months late, the penalty is $13,000 (100 × $130).

1099-NEC Filing Checklist

• Collect W-9s early. Don’t make a payment without one.
• Validate TINs with the IRS TIN Matching tool (interactive or bulk) so you avoid CP2100 ‘B-notice’ headaches.
• Track payments by payee to catch the $600 threshold.
• Report when backup withholding happens — even if the total is under $600.
• Know your state rules: CA often covered via CF/SF when amounts match; PA & NJ require direct filing (NJ is e-file only).
• E-file if you hit 10+ total returns.
• Circle the real 2026 date: Monday, Feb 2, 2026.

Common mistakes and easy fixes

• Using 1099-MISC instead of 1099-NEC for services, use NEC for service fees.
• Not aggregating small payments to the same contractor (e.g., 3 × $250 = $750, you must file).
• Ignoring state differences (especially PA & NJ).
• Paper filing when you must e-file (10-return rule).
• Skipping corrections after an IRS rejection fix quickly to keep penalties low.

Real-life scenarios

1) Freelance designer paid $750

Do you file? Yes.

Form/box: 1099-NEC, Box 1 (nonemployee compensation).

Why: Services met the $600+ annual threshold.

Tip: Track payments monthly so you don’t scramble in January.

2) Three $250 payments to the same photographer (total $750)

Do you file? Yes.

Form/box: 1099-NEC, Box 1.

Why: You must aggregate payments for the calendar year.

Tip: Use vendor summaries to catch multi-invoice totals.

3) $300 payment with backup withholding

Do you file? Yes, even under $600.

Form/box: 1099-NEC, Box 1 (amount paid) and Box 4 (federal income tax withheld).

Why: Any payment with backup withholding is reportable.

Tip: Deposit/report withheld tax on Form 945 and use TIN Matching to prevent future mismatches.

4) Attorney fees of $1,200

Do you file? Yes — even if the law firm is incorporated.

Form/box: 1099-NEC, Box 1 (for fees).

Note: Some gross proceeds related to legal settlements may belong on 1099-MISC, Box 10 (separate from fees).

Tip: Ask vendors to label invoices clearly (fees vs. gross proceeds).

5) State filing in California

Scenario: You paid a contractor reportable on 1099-NEC, and you filed federally via the IRS Combined Federal/State Filing (CF/SF) program.

Do you also file directly with CA FTB? Generally, no. If your state data matches the federal file, the IRS forwards it to FTB.

When might you file directly? If your state data differs from the federal submission, or if FTB specifically requires it.

Tip: Keep W-9 data (name, TIN, address/state) accurate so CF/SF works smoothly.

Final Thought

Stay ahead of February 2, 2026. Use Tax1099 to collect W-9s, validate TINs, and e-file your 1099-NECs in minutes. You will reduce errors, avoid penalties, and maintain strong vendor relationships.

FAQs

When is it due in 2026?

Monday, Feb 2, 2026, for both IRS and recipient copies (next-business-day rule).

Is there an automatic extension?

No. File Form 8809 by the due date; a second 30-day extension is possible only for hardship.

Do I file under $600?

Don’t file unless backup withholding happened.

Is e-filing mandatory?

Yes, if you issue 10+ total information returns across types.

How do I fix an error?

File a CORRECTED return and re-furnish to the IRS and the payee. Correct quickly to limit penalties.

Do corporations get a 1099-NEC?

Generally, no. Except attorneys’ fees (reportable in 1099-NEC Box 1) and payments by federal executive agencies for services (reportable in 1099-NEC Box 1).