The 1099 reporting threshold just jumped to $2,000: what it means if you hired help this season

If you brought on help for the stacked fall and holiday run — a friend running your booth for a weekend, a relative handling your tables so you could work two Events at once, someone building you a new website — October is a good month to tally what you've actually paid them so far this year. A rule that's been stuck at the same number since the 1950s just moved for the first time in decades, and it changes whether you'll need to send that person a tax form in January.

What a 1099-NEC actually is

A 1099-NEC is the form a business sends to a non-employee it paid for services — a contractor, a freelancer, a helper who isn't on payroll — reporting how much they were paid that year. You send a copy to the person, and a copy to the IRS, so the agency has a paper trail matching what you reported paying against what they reported earning. It's the mirror image of the 1099-K your card processor sends you: that one reports money coming in to your business, this one reports money going out to someone you paid.

The threshold just tripled

For as long as most vendors have been in business, the trigger for sending a 1099-NEC was $600 paid to one person or business in a calendar year — a number that hadn't moved since it was set decades ago. That changed this year: legislation signed in 2025 raised the threshold to $2,000, effective for payments made starting with the 2026 calendar year. Cross $2,000 paid to one non-employee this year and you'll need to send them a 1099-NEC (and file a copy with the IRS) by January 31 of next year. Stay under it, and you're not required to.

The number is also set to keep moving: starting in 2027, it adjusts each year for inflation, rounded to the nearest $100. Worth a quick check each fall rather than assuming this year's figure still applies next year — the same habit worth keeping for the 1099-K threshold on the money coming in.

It only covers certain ways of paying

The $2,000 threshold applies to what you paid by check, cash, or direct bank transfer. It does not apply to anything you paid by credit card, debit card, or through a third-party payment app like PayPal, Venmo, or Cash App's business option — those are the payment processor's job to report, on a 1099-K, not yours. The IRS doesn't want the same payment reported twice on two different forms, so whichever channel you used decides who's responsible for the paperwork.

In practice, that means your own count only needs to include what actually went out the old-fashioned way. If you paid your weekend helper by Venmo, that payment is the app's reporting problem, not yours — though it's still worth keeping your own note of it, for the reason below.

What this doesn't change

Whether or not a form ends up getting sent, the money itself works the same as it always did:

• The person you paid still owes tax on it, whether or not a 1099-NEC ever lands in their inbox. The threshold only decides when you're required to report it — it has never decided what they owe.
• You can still deduct what you paid them as a business expense, with or without filing a 1099-NEC. Keep your own record of the payment either way — a canceled check, a bank transfer confirmation, a note in your books — since that's what actually backs up the deduction if you're ever asked.
• A W-9 is still worth collecting before you pay anyone a meaningful amount, not after. It's a lot easier to ask a helper for their name, address, and taxpayer ID before the season ends than to track them down for it in January once you realize you've crossed $2,000.

A reminder this isn't about whether someone's an employee

A higher reporting threshold doesn't change who actually qualifies as a contractor versus who should have been on payroll as an employee with taxes withheld. That classification question — how much control you have over when, where, and how someone works, whether they're doing the same work for other vendors too — is a separate issue from this form, and it's worth getting right before you pay anyone, not after a season's worth of payments are already out the door. If you're not sure which side of that line your booth help falls on, that's a question for a professional, not a guess.

Why October is the moment to check this

A lot of the hiring that happens for a vendor's year happens exactly now — someone to run a booth so you can be in two places on a busy fall weekend, extra hands for a multi-day Festival, a photographer for new listing photos before the holiday push. Those payments, plus anything you already paid earlier in the year, all count toward the same $2,000 running total for the same person. Tallying it now, while the season's still going, means you'll know in November whether a given helper is headed toward that number — instead of adding it all up for the first time in January and discovering you need a W-9 you never asked for.

A quick disclaimer

This is general information, not tax advice for your specific situation — how a payment is classified, who counts as an employee versus a contractor, and what your own filing obligations are can all depend on details a short post can't cover. Confirm anything that affects your own return with a CPA or other licensed tax professional.

Artisans Almanac offers a 30-day free trial if you want this season's payments to booth help logged as expenses in one place, instead of reconstructed from memory when a tax form comes due.