1099-NEC and 1099-K Thresholds by State (2026)

The federal bar dwarfs every state figure, which is the point: if you live in Massachusetts or Illinois, a payment app can send your state a form long before the IRS gets one. Arkansas and New Jersey figures come from general Form 1099 rules, not 1099-K rules by name.

The IRS had planned to step down to $600 by 2026. Those scheduled figures never took hold, and the $20,000 test now applies instead, retroactively.

Contractor pay now needs $2,000 before a 1099-NEC is required, but royalties still trigger at $10 and attorney payments at $600. Check which box your payment falls in before assuming you are under the line.

Several states kept lower figures after the federal change. Wisconsin and DC still name $600, and New Jersey names $1,000, so a state copy can be due even when the payment looks small.

Most states with an income tax use the federal 1099-K test. Nine jurisdictions, DC among them, have their own lower trigger for some or all payees, and nine states have no broad income tax to report to.

Federal information-return thresholds, 2025 versus 2026 payments

Source: Internal Revenue Service, Instructions for Forms 1099-MISC and 1099-NEC (Rev. April 2025); Internal Revenue Service, Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026); Internal Revenue Service, IR-2025-107: IRS issues FAQs on Form 1099-K threshold under the One, Big, Beautiful Bill; dollar limit reverts to $20,000; Internal Revenue Service, Form 1099-K frequently asked questions. Download as image

State rules for filing Forms 1099-NEC and 1099-MISC with the state (verified states)

Source: Arkansas Department of Finance and Administration (text via Cornell Legal Information Institute), 1.26 Ark. Code R. 51-811(a) - Recipients of Income - Generally; California Franchise Tax Board, Guidance for reporting information returns; District of Columbia Office of Tax and Revenue, Tax Year 2025 MyTax 1099/W-2G Instructions; Illinois Department of Revenue, Publication 110, Forms W-2, W-2c, W-2G, and 1099 Filing and Storage Requirements for Employers and Payers, including 1099-K Electronic Filing Requirements; Comptroller of Maryland, 2025 Maryland Employer Reporting of 1099 Instructions and Specifications; Massachusetts Department of Revenue, Form 1099 Filing Requirements; New Jersey Division of Taxation, NJ-WT, New Jersey Income Tax Withholding Instructions; Wisconsin Department of Revenue, Forms W-2 and 1099 Filing by Employers and Others Making Reportable Payments (Guidance Document 100129). Download as image

How the federal Form 1099-K threshold changed

Source: U.S. Government Publishing Office (govinfo.gov), American Rescue Plan Act of 2021, Public Law 117-2, Section 9674, Modification of exceptions for reporting of third party network transactions; Internal Revenue Service, IR-2023-221: IRS announces delay in Form 1099-K reporting threshold for third party platform payments in 2023; plans for a threshold of $5,000 for 2024 to phase in implementation; Internal Revenue Service, IR-2025-107: IRS issues FAQs on Form 1099-K threshold under the One, Big, Beautiful Bill; dollar limit reverts to $20,000; Internal Revenue Service, Form 1099-K frequently asked questions; Internal Revenue Service, IR-2024-299: IRS provides transition relief for third party settlement organizations; Form 1099-K threshold is $5,000 for calendar year 2024 (Notice 2024-85). Download as image

State Form 1099-K reporting trigger for 2026 by state

• 9Lower state trigger (all or some payees)
• 29Federal standard ($20,000 and 200 transactions)
• 9No broad state income tax

What is the 1099-K threshold for 2026?

At the federal level, a payment app or card processor sends you a 1099-K only when two things are both true for the year: payments over $20,000, and more than 200 transactions. Hit one and not the other, and no federal form is required.

That test is not new. It was the rule before the American Rescue Plan Act of 2021 tried to cut it to $600. The IRS delayed that cut, then announced a phase-in of $5,000 for 2024, $2,500 for 2025 and $600 for 2026. The One, Big, Beautiful Bill wiped out the phase-in and restored the old test retroactively. California's tax agency describes it as retroactive to 2022.

So if you read in 2024 that you would get a 1099-K for anything over $600 in 2026, that is no longer true at the federal level. It may still be true in your state.

Why does this matter if you are under the line? Because state tax agencies and the IRS compare forms against returns. A 1099-K from Massachusetts or Illinois that your return does not account for can lead to a letter asking you to explain the gap. It is easier to reconcile your app statements once a year than to answer that letter later.

Which states have a lower 1099-K threshold?

Nine places on the map have a lower trigger for some or all payees, and DC is one of them. The clearest ones:

• Massachusetts: $600, with no minimum number of transactions, for anyone with a Massachusetts address. The form goes straight to the Department of Revenue.
• Illinois: more than $1,000 and 4 or more transactions, for payees with an Illinois address, filed through the state's own FIRE system.
• Vermont: the Department of Taxes now cites $2,000.
• California: the federal test for most people, but $600 for app-based drivers.
• District of Columbia: $600 or more on all Forms 1099 under the tax year 2025 instructions, filed separately with the city.
• Arkansas and New Jersey: general Form 1099 rules at $2,500 and $1,000. Maryland and Virginia tie their rule to the federal section 6041(a) minimum and have not published a 2026 dollar figure.
• If your state is not on this list, it either follows the federal test, has no broad income tax, or has a rule we could not yet confirm against a state source. The map marks which is which.

Do I get a 1099-NEC if a client paid me less than $2,000?

Not from the federal rules, for payments made in 2026. The IRS raised the 1099-NEC threshold from $600 to $2,000 for tax years beginning after 2025, and it may be adjusted for inflation starting in 2027. The same $2,000 line now applies to backup withholding.

Here is the part people miss: the threshold decides whether your client has to file a form. It has nothing to do with what you owe. A small project paid by check with no 1099 attached is still income you report.

Your state may also want its own copy. Wisconsin's guidance still names $600 for nonwage pay to Wisconsin residents. New Jersey asks for copies at $1,000 or more, or whenever New Jersey tax was withheld. Maryland only wants them when Maryland tax was withheld. If you have one-off clients scattered across states, you may get forms from some and not others for similar amounts.

Why did I get a 1099-K instead of a 1099-NEC?

Because of how you were paid. When a client pays you by card or through a payment app, the processor handles the reporting on a 1099-K, and the client generally does not issue a 1099-NEC for the same money. When a client pays by check, ACH or wire, the client is the one who files the 1099-NEC.

A quick example. Say you live in Illinois and a client pays you through a payment app in 4 or more payments that add up to more than $1,000. Illinois expects a 1099-K for that. The IRS does not, because you are nowhere near $20,000 and 200 transactions. Same money, two different answers.

That has a practical side. If most of your income runs through a payment app and you stay at 200 transactions or fewer, you may get no federal form at all in 2026, even on a good year. If you live in Massachusetts, you could get a state form at $600. Keep your own books either way. The forms are a cross-check for the tax agency, not a record of what you earned.

One more wrinkle: personal payments on the same app, like splitting a dinner bill or getting paid back for rent, are not business income. If you use one account for both, a state with a low trigger may send a form that overstates your earnings. A separate business account fixes that before it starts.

What should businesses that pay contractors do differently?

Update your vendor process for 2026 payments. The federal 1099-NEC line is $2,000, but that is not the only line that matters. Royalties still trigger at $10, gross proceeds paid to an attorney at $600, and direct sales of consumer products for resale at $5,000.

Then check where your contractors live. The IRS Combined Federal/State Filing Program covers 32 jurisdictions for tax year 2025, 31 states plus DC, and passes your forms along to them. It does not handle everything. Massachusetts wants 1099-K and 1099-NEC filed directly, DC wants all 1099s filed directly, and Maryland says it will not process 1099s that come through the program.

Deadlines differ too. Massachusetts and DC want their copies by January 31. New Jersey's due date is February 15. Collect a W-9 before the first payment so none of this turns into a scramble in January.

What freelancers should do with these numbers

• Find your state on the map and note whether it has a lower trigger.
• Track every payment yourself, including ones under $2,000 that will never show up on a form.
• Note which clients pay through apps and which pay directly, so you know which form to expect from whom.
• If you live in Massachusetts or Illinois, you can get a state 1099-K well below the federal line.
• Give clients a W-9 up front. Without a valid taxpayer ID, a client can withhold tax from your payment once you cross the backup withholding threshold.

Sources and method

Every number on this page comes from the sources below, each opened and read on or before October 17, 2026. A second, independent review checked every figure against its source and corrected anything that did not match. 47 of 51 state entries were confirmed; any that could not be are marked "Not yet confirmed" and left out of every count and chart.

1. Internal Revenue Service, Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026) (Rev. December 2026 (for 2026 information returns))
2. Internal Revenue Service, Instructions for Forms 1099-MISC and 1099-NEC (Rev. April 2025) (Rev. April 2025)
3. Internal Revenue Service, IR-2025-107: IRS issues FAQs on Form 1099-K threshold under the One, Big, Beautiful Bill; dollar limit reverts to $20,000 (October 23, 2025)
4. Internal Revenue Service, Form 1099-K frequently asked questions (Last updated September 29, 2026)
5. Internal Revenue Service, IR-2024-299: IRS provides transition relief for third party settlement organizations; Form 1099-K threshold is $5,000 for calendar year 2024 (Notice 2024-85) (November 26, 2024)
6. Internal Revenue Service, Publication 1220, Specifications for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G For Tax Year 2025 (Rev. 5-2026, for Tax Year 2025)
7. California Franchise Tax Board, Guidance for reporting information returns (Last updated April 3, 2026)
8. Massachusetts Department of Revenue, Form 1099 Filing Requirements (Updated July 24, 2026)
9. Illinois Department of Revenue, Publication 110, Forms W-2, W-2c, W-2G, and 1099 Filing and Storage Requirements for Employers and Payers, including 1099-K Electronic Filing Requirements (PUB-110 (R-01/26), January 2026)
10. Vermont Department of Taxes, 1099-K Notices (Undated web page, read October 15, 2026)
11. Vermont Department of Taxes, New Law Lowers Reporting Threshold for 1099-K Information Reporting (December 19, 2017)
12. Comptroller of Maryland, 2025 Maryland Employer Reporting of 1099 Instructions and Specifications (Version 1.0, October 2025)
13. Maryland General Assembly, Maryland Code, Tax-General Article, Section 10-825 (Current statute text, read October 15, 2026)
14. Virginia General Assembly (Legislative Information System), Code of Virginia Section 58.1-356, Reporting of payments by third-party settlement organizations (Current statute text, read October 15, 2026)
15. Virginia Department of Taxation, Did you receive a 1099-K? What you need to know (February 18, 2021)
16. District of Columbia Office of Tax and Revenue, Tax Year 2025 MyTax 1099/W-2G Instructions (Revised 09/2025, version 1.0)
17. New Jersey Division of Taxation, NJ-WT, New Jersey Income Tax Withholding Instructions (September 2025)
18. Arkansas Department of Finance and Administration (text via Cornell Legal Information Institute), 1.26 Ark. Code R. 51-811(a) - Recipients of Income - Generally (Rule text as reproduced by Cornell LII, read October 15, 2026)
19. Wisconsin Department of Revenue, Forms W-2 and 1099 Filing by Employers and Others Making Reportable Payments (Guidance Document 100129) (February 20, 2026)
20. North Carolina Department of Revenue, Guidance on Information Reporting (Undated web page, read October 15, 2026)
21. Thomson Reuters, State tax information reporting: what changed in 2025 and what to expect for 2026 (May 19, 2026)
22. Tax Foundation, State Individual Income Tax Rates and Brackets, 2026 (February 17, 2026 (updated February 19, 2026))
23. 1099FIRE, State-Specific 1099-K Thresholds: What Businesses Should Know (August 17, 2025)
24. 1099kstatemap.us, 1099-K threshold decoder: federal $20,000 vs your state (TY2026) (Row-level 'last verified' dates (May 12, 2026 for Rhode Island and other verified rows; many rows unverified); read October 15, 2026)
25. U.S. Government Publishing Office (govinfo.gov), American Rescue Plan Act of 2021, Public Law 117-2, Section 9674, Modification of exceptions for reporting of third party network transactions (Enacted March 11, 2021)
26. Internal Revenue Service, IR-2023-221: IRS announces delay in Form 1099-K reporting threshold for third party platform payments in 2023; plans for a threshold of $5,000 for 2024 to phase in implementation (November 21, 2023)