1099s for subcontractors: what changed for 2026 and how to get ready for January
A general overview of 1099s for subcontractors, the IRS's new $2,000 Form 1099-NEC threshold for 2026, the January 31 deadline, and how collecting W-9s early may help.
Not advice. General information only, based on our research of publicly available sources, which can change. It is not legal, insurance, tax or accounting advice. Rules can vary by state, carrier and contract, so please talk to your insurance agent, attorney or tax professional about your situation.
In short: Payments to subcontractors for services are commonly reported on Form 1099-NEC. For tax years beginning after 2025, the IRS's reporting threshold is $2,000 (up from $600), and Form 1099-NEC is due by January 31. Collecting a W-9 from each sub before the first payment, as the IRS describes, may make January much easier. Your accountant can advise on your situation.
Each January, many general contractors send 1099s to the subcontractors they paid during the year. It's a short form with a firm deadline, and how smoothly it goes often comes down to one thing: whether a W-9 was collected from each sub before they were paid. Here's a general overview, including a change for 2026. The IRS instructions linked below are the authority, and your accountant or tax preparer can advise on your situation.
Starting with the W-9
The IRS's guidance on independent contractors describes the order of operations. Once you've determined that someone you're paying is an independent contractor, "the first step is to have the contractor complete" Form W-9, which provides their name and taxpayer identification number. The IRS also says the W-9 "should be kept in your files for four years."
Many contractors make collecting a W-9 part of onboarding, before the first payment, much like certificates of insurance. Tracking down a W-9 in January from a sub paid the previous spring is a common source of 1099 headaches.
Form 1099-NEC, and what changed for 2026
Payments to subcontractors for their services are commonly reported on Form 1099-NEC (nonemployee compensation).
The threshold went up. The IRS's 2026 instructions for Forms 1099-MISC and 1099-NEC say: "For tax years beginning after 2025, the minimum threshold amount for reporting certain payments required to be reported on certain information returns and/or perform backup withholding on those payments increased to $2,000 and may be adjusted for inflation beginning in calendar year 2027." For nonemployee compensation, the instructions say to "Enter nonemployee compensation (NEC) of $2,000 or more."
So for payments made in 2026 (reported in early 2027), the IRS instructions show $2,000 rather than the earlier $600 figure, and the threshold may be adjusted for inflation from 2027. Your accountant can tell you how this applies to your subs.
The January 31 deadline
The same IRS instructions say: "Section 6071(c) requires you to file Form 1099-NEC on or before January 31, using either paper or electronic filing procedures." Because January 31 comes quickly after the holidays, having W-9s on file well ahead of time may make the month much calmer.
How 1099s can come up at a workers' comp audit
This is a connection that may not be obvious. Your 1099s amount to a list of many of the people you paid outside payroll, and workers' comp auditors may ask for them. The Hartford's audit checklist, for example, includes "tax forms such as W-2, 1099" alongside a "certificate of insurance for every subcontractor."
An auditor might then compare the two, looking for evidence of each sub's own workers' comp coverage for the period. Where there isn't any, those payments could be added to your payroll, depending on your carrier and state. More in workers' comp audits and subcontractors and our workers' comp audit overview.
A year-round routine some contractors use
- Before the first payment: W-9 and certificate of insurance on file.
- With each payment: log it against the sub, with the date.
- Through the year: keep certificates current, so payment dates are covered.
- In January: total each sub's payments and, with your accountant, prepare 1099s from the W-9s already on file.
Frequently asked questions
What is the 1099-NEC threshold for 2026?
The IRS's 2026 instructions say the reporting threshold increased to $2,000 for tax years beginning after 2025, and may be adjusted for inflation beginning in 2027.
When is Form 1099-NEC due?
According to the IRS instructions, Form 1099-NEC is filed on or before January 31.
Do I need a W-9 from every subcontractor?
The IRS describes having the contractor complete Form W-9 as the first step once you've determined someone is an independent contractor, and says to keep it on file for four years.
Are 1099s used in a workers' comp audit?
They can be. Workers' comp auditors often ask for tax forms including 1099s, and may compare them with the certificates of insurance on file for each subcontractor.
How CertiSub is designed to help
CertiSub asks each sub for their W-9 and certificate through a no-login upload link and follows up automatically until they arrive. Your payment log sits alongside them, and Settings → Your data exports your subcontractors and payments as spreadsheets, which may give your accountant a head start in January.
This article is for general informational purposes only. It reflects our research of publicly available sources as of its publication date and may not be complete or current. It is not legal, insurance, tax or accounting advice, and reading it does not create any professional relationship. Requirements can vary by state, insurance carrier, policy and contract. Before making decisions, consult a licensed insurance professional, an attorney, or a tax professional about your specific situation. CertiSub is a recordkeeping and document-organization tool. It tracks the documents and dates you provide. It does not verify insurance validity or provide legal, insurance, or compliance advice.