Which 1099s Should a Consultant Expect for 2026?

For 2026 consulting income, a client that pays you by check, ACH or wire generally sends a Form 1099-NEC once it has paid you $2,000 or more, up from $600. If a client pays by card or through a payment app, the processor reports it instead on Form 1099-K. For payment apps, that happens only above $20,000 and 200 transactions. Both forms are due to you by February 1, 2027. Neither threshold changes what you owe tax on: all of it.

Form 1099-NEC: Clients Paying You Directly

A client reports nonemployee compensation on Form 1099-NEC when it paid someone who is not its employee, for services in the course of its trade or business, and paid that person at least $2,000 during the year. The $2,000 threshold applies for tax years beginning after 2025 and may be adjusted for inflation starting in 2027 (IRS, Instructions for Forms 1099-MISC and 1099-NEC).

Payments to corporations are generally not reportable, so a consultant operating through an S corporation or C corporation may receive few or no 1099-NECs. Legal fees are the main exception.

Form 1099-K: Card and App Payments

If a client pays by credit card, debit card or through a third party network, that payment “must be reported on Form 1099-K by the payment settlement entity… and [is] not subject to reporting on Form 1099-MISC or Form 1099-NEC” (IRS, 1099-NEC instructions).

• Payment apps and online marketplaces report only when your payments exceed $20,000 and the number of transactions exceeds 200 (26 U.S.C. §6050W(e)). The 2025 law (P.L. 119-21) restored this threshold retroactively, replacing the $600 figure the IRS had been phasing in.
• Card processors report card payments with no minimum (IRS, Understanding your Form 1099-K).

The Rule That Doesn’t Change

The IRS is direct about it: “No matter the amount of reported payments, if you receive payments for selling goods or services, you must report all income on your tax return” (IRS, Understanding your Form 1099-K). A higher threshold means fewer forms, not less taxable income. Your own books are what the return is prepared from.

When the Forms Arrive

Both forms are due to recipients by January 31. When a due date falls on a weekend or legal holiday, it moves to the next business day (IRS, General Instructions for Certain Information Returns). January 31, 2027 is a Sunday, so 2026 forms are due by February 1, 2027.

What to Do Now

1. Keep a payer list for 2026. Record each client, how it paid (check, ACH, card, app) and the total.
2. Watch for double reporting. A client that paid part by ACH and part by card could send a 1099-NEC while the card processor issues a 1099-K. Your books show the income once.
3. Ask for corrections early. If a form doesn’t match your records, contact the issuer in February, not in April.
4. If you also pay subcontractors, the same $2,000 threshold applies to the 1099-NECs you send.

Sources

• IRS, Instructions for Forms 1099-MISC and 1099-NEC: https://www.irs.gov/instructions/i1099mec
• IRS, Understanding your Form 1099-K: https://www.irs.gov/businesses/understanding-your-form-1099-k
• 26 U.S.C. §6050W (and P.L. 119-21 §70432 amendment note): https://www.law.cornell.edu/uscode/text/26/6050W
• IRS, General Instructions for Certain Information Returns: https://www.irs.gov/instructions/i1099gi

Educational content only. Not tax, legal, or investment advice. Tax strategies depend on your specific facts and circumstances. Consult a qualified professional regarding your situation. Past results do not guarantee future outcomes.