The 1099-NEC $2,000 Threshold for Landlords Paying Contractors (2026)

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Educational only, not tax advice. Rental Money Playbook explains general IRS rules in plain English. The author is not a CPA, enrolled agent, attorney, financial advisor, or tax preparer. The examples below are hypothetical, and your situation may be different.

Last updated: November 12, 2026. The $2,000 threshold and filing rules were checked against IRS.gov on that date.

If you pay a plumber, cleaner, or handyman out of your own account, you may have a Form 1099-NEC job at year-end. The dollar amount that triggers that form went up for payments made after 2025.

Quick answer: For payments made after December 31, 2025, you generally file Form 1099-NEC if, in the course of your business, you paid at least $2,000 during the calendar year to a person who is not your employee for services, including payments to an attorney (IRS: Form 1099-NEC and independent contractors; Instructions for Forms 1099-MISC and 1099-NEC (12/2026)). The old $600 threshold still applied to payments made before 2026. Credit card and certain third-party network payments are reported on Form 1099-K by the payment company, not on a 1099-NEC by you. Form 1099-NEC is due to the IRS and to the recipient by January 31 (or the next business day if that date falls on a weekend or holiday).

What changed, and when it applies

The IRS FAQ on Form 1099-NEC states the rule in one sentence: report payments totaling $600 ($2,000 for payments made after December 31, 2025) or more during the calendar year, in the course of a business, to a person who is not an employee for services (IRS: Form 1099-NEC and independent contractors). A related IRS page says the same thing by year: $600 for payments made before 2026, and $2,000 for payments made in 2026 (IRS: Am I required to file a Form 1099 or other information return?). The 2026 instructions add that the $2,000 minimum may be adjusted for inflation beginning in calendar year 2027 (Instructions for Forms 1099-MISC and 1099-NEC (12/2026), “What’s New”).

The threshold is a calendar-year total per contractor, not a per-invoice amount. A $1,200 payment in March 2026 and an $900 payment in October 2026 to the same person add up to $2,100 and meet the 2026 threshold.

Who this guide is for

This guide is for individual landlords and short-term rental hosts who pay independent contractors for rental work and report the activity on Schedule E. It is about the information return you may have to file, not how to classify a worker. That determination depends on behavioral control, financial control, and the relationship of the parties, not on how you label the check (IRS: Form 1099-NEC and independent contractors). Employees are reported on Form W-2, not Form 1099-NEC.

The four conditions for a 1099-NEC

The 1099-NEC instructions say you must generally report a payment as nonemployee compensation if all of the following are true (Instructions for Forms 1099-MISC and 1099-NEC, Box 1a):

  • You made the payment to someone who is not your employee.
  • You made the payment for services in the course of your trade or business (including government agencies and nonprofit organizations).
  • You made the payment to an individual, partnership, estate, or, in some cases, a corporation.
  • You made payments to the payee of at least $2,000 during the year.

The amount in box 1a includes fees and other compensation for services, and it includes parts and materials if supplying them was incidental to providing the service. The instructions give the example of a repair contract that bills labor and parts together (Instructions for Forms 1099-MISC and 1099-NEC, Box 1a, “Examples”). A plumber’s invoice that lists a faucet and the labor to install it can work the same way.

Personal payments are not reportable. You report on Form 1099-NEC only when payments are made in the course of your trade or business (Instructions for Forms 1099-MISC and 1099-NEC, “Trade or business reporting only”). The 2026 draft Instructions for Schedule E, Line A, tell Schedule E filers: in general, if you paid at least $2,000 for services performed by someone who is not your employee, you must file Form 1099-NEC (2026 Schedule E instructions, draft, Line A). That draft is labeled “not for filing.” If you are unsure whether a particular rental is a trade or business for this purpose, ask a tax pro.

Payments that usually do not go on your 1099-NEC

The instructions list several payments for which a Form 1099-NEC is not required, even if they may be taxable to the recipient. The ones small landlords ask about most often are:

Payments made with a credit card or payment card, and certain other payments including third-party network transactions, must be reported on Form 1099-K by the payment settlement entity and are not subject to reporting on Form 1099-NEC (Instructions for Forms 1099-MISC and 1099-NEC, “Form 1099-K”). If you paid the contractor with a credit card or through a third-party network, don’t also issue a 1099-NEC for that same payment. Payments by check, cash, or a transfer from your own bank account generally still count toward your 1099-NEC total.

The way to know whom you paid, and whether the payee is a corporation, is to collect a completed Form W-9 before (or as soon as) you start paying them. The W-9 gives you the legal name, taxpayer identification number (TIN), and federal tax classification. Keep W-9s in a secure place. Don’t store Social Security numbers or EINs in a shared spreadsheet.

Attorneys, backup withholding, and Form 1099-MISC

Attorneys’ fees of $2,000 or more paid in the course of your trade or business are reportable in box 1a of Form 1099-NEC, including fees paid to a law firm that is a corporation (Instructions for Forms 1099-MISC and 1099-NEC, “Payments to attorneys”). Gross proceeds paid to an attorney that are not for the attorney’s services belong on Form 1099-MISC, which this guide does not cover in detail.

You must also file Form 1099-NEC for each person from whom you withheld any federal income tax under the backup withholding rules, regardless of the amount of the payment (Instructions for Forms 1099-MISC and 1099-NEC). The IRS describes the current backup withholding rate as 24 percent when the payee has not furnished a correct TIN (IRS: Backup withholding). Report withheld tax in box 4. If a contractor will not give you a TIN, talk with a tax pro before you pay them.

Most contractor labor you pay yourself belongs on Form 1099-NEC, not Form 1099-MISC. Form 1099-MISC is still used for certain other payments, such as rents of $2,000 or more in 2026. Paying rent to a real estate agent or property manager is generally not reported by you; the agent or manager reports the rent paid over to the owner (Instructions for Forms 1099-MISC and 1099-NEC, Box 1. Rents).

Deadlines, e-file, and Schedule E

You must file Form 1099-NEC with the IRS and furnish a statement to the recipient by January 31, whether you file on paper or electronically. If the due date falls on a Saturday, Sunday, or legal holiday, the due date is the next business day (Instructions for Forms 1099-MISC and 1099-NEC, “Filing dates”). January 31, 2027, is a Sunday, so the due date for 2026 Forms 1099-NEC is Monday, February 1, 2027.

The e-file threshold for information returns is 10, calculated by aggregating all information returns, for returns required to be filed on or after January 1, 2024 (Instructions for Forms 1099-MISC and 1099-NEC, “E-filing returns”). The IRS provides an online portal called IRIS for e-filing information returns (IRS.gov/IRIS).

Schedule E, Part I, starts with two yes-or-no questions: whether you made any payments during the year that would require you to file Form(s) 1099, and if yes, whether you did or will file them (2025 Schedule E (Form 1040); the same questions appear on the 2026 Schedule E draft for payments in 2026). Those questions are why it helps to total each contractor during the year, not in January.

Hypothetical example: two contractors in 2026

Hypothetical example (made-up names and amounts): in 2026, a landlord pays a sole-proprietor plumber $2,200 by check, a cleaning LLC that checked “C Corporation” on its W-9 $3,400 by check, and a third contractor $2,500 entirely by credit card. The plumber generally needs a Form 1099-NEC. The corporation (other than an attorney) generally does not. The credit-card payments are reported on Form 1099-K by the payment company, not by the landlord on Form 1099-NEC. A different entity type, a missing W-9, or a mix of check and card payments can change the result.

A simple contractor list, with totals by check or bank transfer versus card or payment app, makes this review much faster in January. Our Rental Income & Expense Tracker (Essentials) is coming soon. It has a contractors tab that flags payees at or over the $2,000 threshold for payments after December 31, 2025, and it does not store tax ID numbers. It’s a tool for organizing records, not tax advice, and it isn’t for sale yet.

A practical mid-year checklist

  • Get a Form W-9 from each new contractor before you pay them, and keep it somewhere secure.
  • Total what you paid each person this year, keeping check, cash, and bank-transfer amounts separate from card and payment-app amounts.
  • If you will file 10 or more information returns of all types, plan to e-file.

FAQ

Does the $2,000 threshold apply to payments I made in 2025?

No. For payments made before 2026, the reporting threshold is $600. The $2,000 threshold applies to payments made after December 31, 2025 (IRS: Am I required to file a Form 1099?).

I paid a contractor $1,800 in 2026. Do I issue a 1099-NEC?

Generally no, if that is the total for the year, you withheld no backup withholding, and no other reporting rule applies. The 2026 threshold for nonemployee compensation is $2,000 (Instructions for Forms 1099-MISC and 1099-NEC, Box 1a). Keep the invoices in case a later payment in the same year pushes the total over the line.

Do I send a 1099-NEC if I paid with a credit card?

Generally no for that payment. Credit card, payment card, and certain third-party network transactions are reported on Form 1099-K by the payment settlement entity and are not subject to reporting on Form 1099-NEC (Instructions for Forms 1099-MISC and 1099-NEC, “Form 1099-K”).

When is the 2026 Form 1099-NEC due?

The regular due date is January 31 to the IRS and to the recipient. Because January 31, 2027, is a Sunday, the due date moves to the next business day, Monday, February 1, 2027 (Instructions for Forms 1099-MISC and 1099-NEC, “Filing dates”).

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