Last updated: November 2, 2026
The 1099-NEC and 1099-MISC reporting threshold is $2,000 for payments made after December 31, 2025, up from $600. Dynamics GP keeps its own 1099 minimums in 1099 Setup, so check those before printing 2026 forms. The amount gets adjusted for inflation starting in 2027. Some payment types and some states still use lower numbers.
TL;DR. Payments made in 2026 trigger a 1099-NEC or 1099-MISC once you’ve paid a vendor $2,000 in the year, up from $600. Royalties and a few other payments keep lower limits. In Dynamics GP, the dollar minimums sit in 1099 Setup, so check them, test any change in a copy of your company, and keep collecting W-9s before the first payment.
The new 1099 threshold for 2026 is $2,000, and your payables team probably knows the headline already. What’s less clear is whether your accounting system got the memo.
Picture a hypothetical January. Someone prints the 1099 Edit List in the middle of the year-end rush, and either forms show up for vendors who no longer need one or a vendor who does need one gets skipped, because a setting nobody has opened in years still reflects the old rules. Both are cheap to prevent before the year-end rush.
Argus Consulting Group is a Dynamics GP partner in Pasadena, founded in 1989, with GP experience since 1993. We help finance teams at small to medium sized companies get more out of the financial system they already run, and we offer options instead of pressure. This post covers what the IRS changed, what it left alone, and what a Controller, CFO, or president can check in GP before 2026 forms go out.
What Changed With the 1099 Threshold in 2026?
Payments made after December 31, 2025 trigger a 1099-NEC or 1099-MISC once they reach $2,000 for the year, up from $600. The amount gets adjusted for inflation starting in 2027.
Congress made the change in the One Big Beautiful Bill Act (Public Law 119-21, section 70433), and the IRS’s 2026 instructions for Forms 1099-MISC and 1099-NEC say to report nonemployee compensation of $2,000 or more, so a vendor who lands on exactly $2,000 gets a form. Exactly $2,000 counts.
| Form and box | Before 2026 | Payments made in 2026 |
|---|---|---|
| 1099-NEC, box 1a (nonemployee compensation) | $600 | $2,000 |
| 1099-MISC, box 1 (rents) | $600 | $2,000 |
| 1099-MISC, box 3 (prizes, awards, other income) | $600 | $2,000 |
| 1099-MISC, box 6 (medical and health care) | $600 | $2,000 |
| 1099-MISC, box 9 (crop insurance proceeds) | $600 | $2,000 |
That covers the headline. Treasury’s companion regulation, proposed on April 17, 2026 as REG-113229-25, applies the $2,000 figure to payments made on or after January 1, 2026. The statute sets the number. Ask your CPA whether you need to wait on a final regulation before updating your process.
Which Payments Still Use the Old Numbers?
Not everything moved. Per the same IRS instructions, royalties in MISC box 2 stay at $10 and so do broker substitute payments in box 8, while gross proceeds paid to an attorney (box 10) and fish purchased for resale (box 11) stay at $600.
That’s a short list, and it’s the one that bites. An AP team that flips every box in GP to $2,000 because the threshold changed will quietly stop reporting royalty payments that still need a form at $10. Easy mistake. Real consequences.
Two carve-outs sit outside the dollar figure. Payments to corporations, including LLCs taxed as C or S corporations, are generally exempt, with exceptions such as attorneys’ fees in box 1a. And 1099-K runs on its own track, rolled back to $20,000 and 200 transactions effective for 2025.
Do You Still Need W-9s for Vendors Under $2,000?
Collect the W-9 before the first payment. Simple rule, easy to skip. Without a taxpayer ID on file, backup withholding can apply at 24%, and a vendor who crosses $2,000 in November turns into a year-end scramble.
An early-release draft of the IRS’s W-9 requester instructions (Rev. June 2026) says the $2,000 level applies to backup withholding too, and that you must withhold 24% on reportable payments when a payee doesn’t furnish a TIN. If you do withhold, you file a 1099 no matter how small the payment.
A W-9 at vendor setup costs the vendor a few minutes. It’s a small ask. Chasing one in January costs your whole team more than that, and the vendor has little reason to hurry. Build the request into how new vendors get entered in your financial system, and the threshold stops mattering for this part of the job.
- Hold the first payment until the W-9 arrives.
- Under $2,000 so far? Keep the running total honest.
- Crossed it. Form required.
- Corporation, or an LLC taxed as one? Check the exceptions before you skip anything.
How Does Dynamics GP Decide Who Gets a 1099?
GP updates 1099 details when an invoice is paid, not when it’s dated, and prints a form only when a vendor’s yearly total meets the minimum set for that 1099 type and box in 1099 Setup.
Microsoft’s troubleshooting article on 1099s that aren’t printing walks through it. Open Tools, then Setup, then Purchasing, then Payables, and select the 1099 Setup button, where the minimums are listed by type and box, though the article’s own example uses $600 for MISC box 7 and the page was last updated on April 17, 2025, long before the change.
A couple of details in that article deserve a second look. Payment date wins, so an invoice dated in 2025 but paid in 2026 lands in the 2026 total. The 1099 Amount on an invoice can also be edited to $0.00 before posting, which means a vendor’s year-to-date can be low for reasons that have nothing to do with the threshold. Easy to miss.
Tax law changed on January 1. Whether your GP setting changed with it depends on your version, your update history, and whether anyone has opened that window since. That’s worth a check.
When a number looks wrong, GP support gets to the cause faster than rebuilding reports by hand.
How Do You Check the GP Minimums Without Breaking Anything?
Do this in a copy of your company first. The order below is a working plan, not a tested procedure.
- Start with a backup, restored as a test company.
- Run the 1099 Edit List and save it, since that’s your before picture.
- Open 1099 Setup and write down every minimum, by type and box.
- Next comes a list of vendors with 2026 payments between $600 and $1,999.99. Those are the forms that change.
- Change only the boxes the IRS moved. Leave the $10 and $600 boxes alone, then rerun the Edit List and compare.
One GP partner’s write-up describes the minimums as a single company-wide setting, which would mean that changing it also affects a corrected 2025 form you reprint later, when 2025 payments still run under the $600 level, and we couldn’t confirm that behavior in Microsoft’s documentation. If your team reprints 2025 forms, run that case before you touch the setting. Skip it and you’re guessing. Check which year-end update your version has against the GP version history.
Do State 1099 Rules Follow the Federal $2,000?
Not everywhere. Don’t assume. Thomson Reuters’ May 19, 2026 roundup shows the split. Mixed picture.
| State | 2026 threshold |
|---|---|
| California | $2,000, adopted beginning with tax year 2026 |
| Mississippi | $600 until amended |
| Wisconsin | $600 until amended |
| Missouri | $1,200 |
| Arkansas | $2,500 when no state income tax is withheld |
State rules shift, and the roundup doesn’t cover every state. If you pay vendors in several states, that table is your homework. Check yours with each state’s revenue department.
What Dates Matter for 2026 Forms?
January 31 and February 28 both fall on Sundays in 2027, so the deadlines roll to the next business day, per the IRS form instructions.
| Form | Payee copy | IRS, paper | IRS, electronic |
|---|---|---|---|
| 1099-NEC | Feb. 1, 2027 | Feb. 1, 2027 | Feb. 1, 2027 |
| 1099-MISC | Feb. 1, 2027 | Mar. 1, 2027 | Mar. 31, 2027 |
Filing electronically is changing. Anyone sending 10 or more information returns in total has to e-file, and the IRS says its FIRE system takes its last filings on November 19, 2026, with IRIS as the only e-file route after January 1, 2027 (see the American Payroll Association’s summary). If your team uploads its own files today, find out this month who handles the move. Plan for it now.
When Is a 1099 Fix Really a Process Problem?
A threshold change is a settings check. It’s not a reason to replace anything.
Run that checklist every year and the same weak spots show up. Who owns vendor setup? Does the W-9 get captured at onboarding or hunted down in January? Does anyone edit 1099 Amount to zero at posting without anybody noticing? All three point at one thing, a process that lives in a single person’s head. Sound familiar? If your January run depends on one person who remembers which windows to open, that’s the finding.
We support Dynamics GP, so of course we’d tell you to look at GP. If your 1099s run through a payroll provider or a separate AP tool, parts of this won’t apply to you. And whether you stay on GP or move to Business Central later, a clean vendor master and a W-9 habit come along with you.
If you’d like a second set of eyes on your 1099 Setup before the January run, start with a Free Business Assessment, or call (626) 403-9744.
Questions Finance Teams Ask About the New 1099 Limit
Is the limit $2,000 or more than $2,000?
At least $2,000. The IRS instructions say to enter nonemployee compensation of $2,000 or more, so a vendor paid exactly $2,000 during the year gets a form.
Do we send 1099s to corporations?
Usually not, though the exceptions matter. The IRS generally exempts payments to corporations, including LLCs taxed as C or S corporations, but exceptions such as attorneys’ fees in box 1a still get reported. A W-9 that records the tax classification settles the question before it becomes one.
Can a vendor under the limit still get a form?
If you withheld backup withholding, you file anyway. The IRS says a payor that backup withholds files the appropriate 1099 even when the payment sits below the normal threshold, which is one more reason to get the W-9 first.
Does the 2026 change touch forms for 2025 payments?
Different year, different rule. Treasury’s proposed regulation applies the $2,000 figure to payments made on or after January 1, 2026, so 2025 payments stay under the $600 level. If you reprint a corrected 2025 form after changing your GP minimums, that’s the spot to double check.
Will Microsoft’s year-end update change the GP minimums?
We couldn’t confirm that. Microsoft’s 1099 troubleshooting article still uses a $600 example, and we found no Microsoft page describing a change for 2026. Treat the setting as yours to check, then read the year-end release notes when they land.
Do states follow the federal $2,000?
California does and Mississippi and Wisconsin don’t, so check each state where you pay vendors.