How to File 1099-NEC in 2027: IRIS Steps, Deadline and Rules

Quick answer: To file 1099-NEC for 2026 payments, collect a W-9 from each contractor, total what you paid them, and file a 1099-NEC for anyone paid $2,000 or more. Send copies to the IRS and the contractor by February 1, 2027. E-file through IRIS, because the old FIRE system is retired.

If you hire freelancers or independent contractors, learning how to file 1099-NEC correctly is one of the few compliance jobs that cannot slide. Filing season 2027 brings two big changes: the reporting threshold jumps from $600 to $2,000 under the One Big Beautiful Bill Act, and the IRS's IRIS portal becomes the only electronic channel after FIRE shuts down. This guide covers who you must report, the 1099 deadline 2027, IRIS e-file steps, penalties and a worked example. Contractors sending you bills can use our free invoice generator, which makes year-end totals easy to verify.

Important: This is general information, not tax advice. Rules for attorneys, foreign payees and backup withholding have extra detail, so check IRS instructions or a tax professional for your case.

What Form 1099-NEC reports

Form 1099-NEC reports nonemployee compensation: payments for services by someone who is not your employee, made in the course of your trade or business. Typical examples are freelance designers, developers, writers, consultants and subcontractors. Rent, prizes and certain other payments go on 1099-MISC instead. Our explainer on 1099-NEC vs 1099-MISC vs 1099-K sorts out which form applies, and our guide to W-2 vs 1099 workers covers classification.

The 2026 form also has new boxes. According to the IRS instructions for Forms 1099-MISC and 1099-NEC, boxes 1b to 1d were added for cash tips, Treasury tipped occupation codes and overtime compensation, and excess golden parachute payments moved to box 3.

Who needs a 1099-NEC: the new $2,000 threshold

For payments made after December 31, 2025, you file a 1099-NEC for each person you paid at least $2,000 in nonemployee compensation during the calendar year. The IRS says the threshold will be adjusted for inflation starting in 2027. Our 1099-NEC threshold guide covers the change in detail.

Item	2025 payments (filed 2026)	2026 payments (filed 2027)
1099-NEC threshold	$600	$2,000
Deadline (IRS and recipient)	January 31, 2026 (moved to February 2, 2026, a Monday)	February 1, 2027 (January 31 is a Sunday)
E-file channels	FIRE or IRIS	IRIS only
E-file required at	10 or more returns in total	10 or more returns in total
Late penalty, filed after August 1	$340 per return	$340 per return

Payments you usually do not report

• Corporations, including LLCs taxed as C or S corporations (attorneys are a key exception).
• Card and app payments, which the processor reports on Form 1099-K. Our 1099-K threshold guide explains the reverted $20,000 and 200 transaction test.
• Employees, who get a W-2.
• Personal payments, such as paying a plumber for your own home rather than your business.
• Foreign contractors working abroad, documented with a Form W-8BEN.

The 1099 deadline for 2027

The Internal Revenue Code requires Form 1099-NEC to be filed with the IRS and furnished to the recipient by January 31. For 2026 payments, January 31, 2027 is a Sunday, so the deadline is Monday, February 1, 2027. IRS Publication 1099 is explicit that Form 8809 gives an automatic 30-day extension for most information returns, but not for Forms W-2 and 1099-NEC. Extensions for 1099-NEC are only granted in limited hardship cases, so treat February 1 as fixed.

IRIS e-file: what changed when FIRE retired

IRS Publication 1099 for 2026 says that starting with tax year 2026 and filing season 2027, IRIS will be the only intake system for information returns, and FIRE will not accept submissions after it shuts down in 2026. If you or your bookkeeper filed through FIRE, you need a new IRIS Transmitter Control Code (TCC).

According to the IRS page on e-filing information returns with IRIS, the system has two channels:

• Taxpayer Portal: a free web portal for smaller filers. You enter forms manually or upload a CSV, up to 100 returns per batch, download recipient copies and file corrections.
• Application to Application (A2A): for software that transmits large volumes directly.

You must e-file if you file 10 or more information returns in total during the year, counting all form types together. Below that, paper filing with Form 1096 and official scannable Copy A forms is still allowed, but IRIS is free and avoids ordering forms.

How to file 1099-NEC step by step

1. Collect a W-9 before you pay. It gives you the contractor's legal name, TIN and tax classification. Our guide to W-9 and 1099 forms for contractors explains what to ask for.
2. Apply for an IRIS TCC early. The IRS warns processing can take up to 45 days, so apply in the autumn, not in late January.
3. Total payments by contractor. Use your accounts payable records and contractors' invoices. Exclude card and payment-app payments that will appear on a 1099-K.
4. Apply the $2,000 test and check entity type from each W-9.
5. Verify names and TINs. The IRS TIN matching program lets payers check name and TIN combinations before filing, which reduces penalty and backup withholding notices.
6. Enter the forms in IRIS (or your software), with box 1 for nonemployee compensation and box 4 for any backup withholding.
7. Furnish recipient copies by February 1, 2027, by mail or electronically if the contractor consented.
8. Submit to the IRS by the same date and save the acknowledgment.
9. File state copies where your state requires them. Some states participate in the combined federal/state program, others require direct filing.

Backup withholding

If a contractor will not provide a TIN, or the IRS tells you their TIN is wrong, you may need to withhold 24% backup withholding from payments, according to IRS Publication 1099. Getting the W-9 before the first payment avoids this.

Special cases that trip up payers

Attorneys and law firms

Payments to attorneys for legal services are reportable on 1099-NEC even if the law firm is a corporation. This is the main exception to the corporate exemption. The $2,000 threshold applies to these payments for 2026 too, according to the IRS instructions. Gross proceeds paid to an attorney, such as a settlement paid through their office, go on 1099-MISC instead.

LLC contractors

A single-member LLC owned by an individual is treated like a sole proprietor, so it generally gets a 1099-NEC. A multi-member LLC taxed as a partnership also generally gets one. An LLC that elected corporate or S corporation treatment generally does not. The tax classification box on the W-9 tells you which applies, which is why you should never pay a new contractor without one.

Mixed payment methods

If you paid a contractor partly by ACH and partly by credit card, only the ACH, check, cash and wire amounts count toward your 1099-NEC total. The card payments are the processor's to report. Run the $2,000 test on the non-card amount only.

Services plus expenses

If a contractor billed you for services plus travel or materials, check the IRS instructions or ask your tax preparer whether the expense portion belongs in box 1. Asking contractors to show services and expenses on separate invoice lines makes the totals easy to separate either way.

Paying through a platform

If you hire through a freelance marketplace and pay through the platform, the platform usually handles payment and any reporting, so you typically do not issue your own 1099-NEC for those amounts. Check the platform's terms for confirmation.

Paper filing and record keeping

If you have fewer than 10 information returns in total and choose paper, order official Copy A forms from the IRS, since printed downloads of Copy A are not scannable. Each form type needs its own Form 1096 transmittal. Recipient copies can be printed on plain paper. Whichever method you use, keep a copy of every 1099-NEC, the W-9s behind them and the payment records for at least as long as the IRS can examine the return, and longer if your state requires it.

Penalties for late or incorrect 1099-NEC forms

Rev. Proc. 2025-32 sets the penalties for information returns required to be filed in 2027. The per-return amounts are the same for small and large businesses, but annual caps are lower for businesses with average gross receipts of $5 million or less:

When corrected or filed	Penalty per return	Annual cap (gross receipts $5M or less)
Within 30 days of the due date	$60	$244,500
After 30 days, by August 1	$130	$698,500
After August 1 or not filed	$340	$1,397,000
Intentional disregard	Greater of $690 or 10% of the amount	No cap

A parallel penalty applies to failing to furnish correct payee statements. The IRS information return penalties page lists the current amounts. A de minimis safe harbor means a dollar error of no more than $100 (or $25 of withholding) is generally not treated as incorrect. If you get a penalty notice, our guide to IRS penalty abatement covers reasonable cause relief.

Worked example: which contractors get a 1099-NEC

A small marketing agency paid these amounts for services in 2026:

Payee	Entity (from W-9)	Paid by	2026 total	1099-NEC?
Web developer	Individual	ACH	$6,500	Yes
Copywriter	Single-member LLC	Check	$2,400	Yes
Illustrator	Individual	ACH	$1,800	No, under $2,000
Video studio	S corporation	Wire	$9,000	No, corporation
Photographer	Individual	Credit card	$3,000	No, reported on 1099-K

The agency files two 1099-NECs: $6,500 and $2,400. Under the old $600 threshold, the illustrator would also have needed one. If the agency missed the deadline and filed both forms on March 20, 2027 (more than 30 days late but before August 1), the filing penalty would be 2 x $130 = $260, plus a possible separate penalty for late recipient copies.

A year-round routine to avoid late filing

The businesses that find January easy are the ones that do a little work all year. A simple routine:

• Onboarding: request a W-9 and confirm the payment method before the first job.
• Monthly: code each contractor payment to contract labor and note whether it was paid by card or bank transfer.
• October: run a year-to-date report by payee, flag anyone approaching $2,000, and apply for or renew your IRIS TCC.
• December: chase missing W-9s and confirm addresses for recipient copies.
• January: finalize totals, file through IRIS and send copies by February 1, 2027.

Tips for contractors receiving 1099-NECs

If you are on the other side, remember that all business income is taxable whether or not a 1099 arrives. With a $2,000 threshold, many freelancers will receive fewer forms for small jobs. Keep your own income records from your invoices, match them to any 1099s and report the full amount on Schedule C. Sending a clean independent contractor invoice with your legal name and TIN details makes your client's 1099 accurate. Our sibling guide on how to file taxes for an LLC explains where that income goes if you operate through an LLC.

Get your contractor records in order

Filing 1099-NEC forms is quick when every contractor payment ties to an invoice with a clear number and date. Ask contractors to bill you using our invoice generator or a minimal invoice template, keep W-9s on file, and you will have everything ready for IRIS well before February 1, 2027. Create your next invoice with the US invoice generator. Every invoice exports as a PDF, so it looks the same on your client's phone, laptop or printer.