IRS 1099-NEC electronic filing for invoicing
Who gets a Form 1099-NEC, how the reporting threshold changed for 2026 payments, when it is due, and how electronic filing is moving from FIRE to IRIS.
If your business pays an independent contractor for services, you may have to report those payments to the IRS on Form 1099-NEC (Nonemployee Compensation) and give the contractor a copy. For payments made through 2025 the reporting threshold is $600 per recipient per calendar year. Under the One Big Beautiful Bill Act, the threshold rises to $2,000 for payments made after December 31, 2025, and is indexed for inflation from 2027. The copy to the recipient and the filing with the IRS are generally due January 31 of the following year. Filers of 10 or more information returns in total must file electronically, and the IRS has announced that its FIRE system is being retired in favor of IRIS. Confirm the current rules on irs.gov before you file. Invoices do not file anything, but a clean invoice history makes the year-end totals easier to check.
- Threshold: $600 for payments through 2025; $2,000 for payments made after December 31, 2025.
- Furnish the recipient copy and file with the IRS by January 31 of the next year.
- 10 or more information returns in total generally must be e-filed.
- FIRE is being retired; IRIS is the IRS system going forward. Confirm dates on irs.gov.
How it works
Collect a Form W-9 before the first payment. The W-9 gives you the contractor's legal name, address, tax classification, and taxpayer identification number.
Decide who is reportable. Payments to individuals, sole proprietors, and most LLCs for services are commonly reportable. Payments to corporations generally are not, with exceptions such as legal services. Read the current IRS instructions for the details.
Add up payments per recipient for the calendar year. Sum what you paid for services, and follow the IRS instructions on what to exclude, such as payments made by card or through a third-party network, which are reported on Form 1099-K instead.
Compare the total with the threshold for the year of payment. Use the threshold that applies to the date the payment was made, not the date you file.
File and furnish by the deadline. File electronically if you meet the e-file requirement, using the IRS system that is current for your filing season, and send the recipient their copy. Check whether your state also requires a copy.
Legal references
- IRS Instructions for Forms 1099-MISC and 1099-NEC — reporting rules, thresholds, and deadlines.
- IRS Publication 1220 and IRIS guidance on irs.gov — specifications for electronic filing of information returns and the retirement of FIRE.
- One Big Beautiful Bill Act (2025) — raised the 1099-NEC and 1099-MISC threshold to $2,000 for payments made after December 31, 2025.
Frequently asked questions
What is the difference between 1099-NEC and 1099-MISC?
Form 1099-NEC reports nonemployee compensation, meaning payments for services by someone who is not your employee. Form 1099-MISC covers other items such as rents, prizes, and royalties. Read the IRS instructions to see which form applies to a payment.
Do I issue a 1099-NEC to a corporation?
Generally no, but there are exceptions, such as payments to attorneys for legal services. The contractor's W-9 shows its tax classification. Check the IRS instructions for your case.
What about contractors I paid through Stripe or PayPal?
Payments made by credit card, debit card, or through a third-party settlement organization are generally reported by that organization on Form 1099-K, not by you on Form 1099-NEC. Check the IRS instructions for the exact rule.
Does 4invoices file 1099 forms or collect W-9s?
No. 4invoices creates invoices with a tax rate per line, supports any currency with an exchange rate, and produces PDFs. It does not file returns with the IRS, collect or verify W-9 data, verify taxpayer IDs, or track contractor totals. Use your accountant or a tax filing provider for 1099 filing.