The OBBBA Act & Form 1099 Reporting

The One Big Beautiful Bill Act (OBBBA) was a sweeping piece of legislation impacting various aspects of the tax code. One lesser-known provision of the Act involves significant changes to the Form 1099 reporting process.

Beginning in tax year 2026, the thresholds for Forms 1099-NEC (Nonemployee compensation) and 1099-MISC (Miscellaneous Income) are increasing from $600 to $2,000. Also introduced by the legislation is a new inflation index beginning in 2027, to increase the threshold in line with inflation. This marks the first change to this threshold since it was established in 1954.

For Form 1099-K (Third-Party Payment Transactions) the OBBBA restored the historical reporting threshold of $20,000 and 200 transactions. This change was introduced following implementation delays of the lowered thresholds proposed in the American Rescue Plan Act of 2021. This return to historical norms prevents a Form 1099-K from being created for “personal transactions” such as reimbursements to friends or family, or for smaller hobby sellers.

Many other 1099 forms remained unchanged by the OBBBA, those thresholds are shown below:

As a reminder, all income is considered taxable, regardless of whether the amount is reflected on a Form 1099. For any additional questions, please contact your Pease Bell tax advisor.