November 14, 2025
There are significant changes to information-return reporting requirements under Public Law 119-21, including revisions to Forms 1099-NEC, 1099-MISC, and 1099-K. The law modifies several thresholds and clarifies reporting responsibilities beginning with tax year 2025 and 2026.
Summary of Key Thresholds Under Public Law 119-21
| Form | Old Threshold | New Threshold under PL 119-21 | Effective Tax Year |
| 1099-K (Third-Party Networks) | $600 | $20,000 AND 200 transactions | 2022–forward (retroactive); applies for 2025 filings |
| 1099-NEC | $600 | $2,000 | 2026 (filed Jan 2027) |
| 1099-MISC | $600 | $2,000 | 2026 (filed Jan 2027) |
Detailed Changes
- Form 1099-K – Threshold Restored to $20,000 AND 200 Transactions
PL 119-21 reverses the previously scheduled $600 reporting threshold and restores the historic standard for payment card transactions and third-party settlement organizations. Effective retroactively to tax year 2022, applicable for 2024 and 2025 filings.
- Forms 1099-NEC and 1099-MISC – Threshold Raised to $2,000 Starting 2026
PL 119-21 increases the reporting threshold for services, rents, prizes, and miscellaneous income to $2,000 per payee per year. This applies beginning with tax year 2026 (filed January 2027). The $600 threshold remains in place for 2025.
- Corporate Service Providers
PL 119-21 reiterates that payments to law firms and certain professional corporations remain reportable, consistent with prior law.
- Backup Withholding & TIN Verification
PL 119-21 strengthens enforcement of TIN verification and backup withholding rules. Backup withholding at 24% must be applied when TIN information cannot be verified. Withholding is reported on Form 945.
Business clients should consider some practical steps to implement these changes such as:
- Updating vendor onboarding procedures now for 2026.
- Evaluate payment channels to determine if 1099-K reporting applies.
- Update accounting system configurations as needed.
- Conduct mid-year and pre-year-end vendor reviews.