1099 Filing Requirements for Marketing Agencies: What Changed for 2026

Marketing and Advertising Agencies run on contractors: a freelance copywriter this month, a paid social specialist the next, a fractional creative director picked up for one campaign. Every one of those payments can trigger one of the 1099 filing requirements, and the rules changed for 2026. The threshold that held steady since 1954 is gone, the rules around payment apps flipped back to where they were before 2022, and the penalties for getting it wrong keep climbing. Here's who gets a form, what the new numbers are, and what it costs to miss the deadline.

Who gets a 1099, and who doesn't

You generally owe a 1099-NEC to any unincorporated contractor, sole proprietor, partnership, or single-member LLC, that you paid for services and that crosses the dollar threshold for the year. Payments to C-corporations and S-corporations are exempt, with one standing exception: attorneys get a 1099 regardless of how they're incorporated. The form only covers payments made by check, cash, ACH, or direct deposit. Anything you paid by credit card or through a third-party payment network, PayPal, Venmo Business, Stripe, is carved out of 1099-NEC reporting entirely and handled separately, which is the next thing that changed. A common agency mix: a freelance designer paid by ACH gets a 1099-NEC if they cross the threshold, a media buyer paid through a platform's Stripe-based payout doesn't, and a law firm retained for a contract dispute gets one no matter how it's structured. Three contractors, three different answers, same agency.

The 1099-NEC threshold just jumped from $600 to $2,000

For payments made during 2025, the threshold is still $600 per contractor, and those forms are due January 31, 2026. Starting with payments made during 2026, the One Big Beautiful Bill Act raises the 1099-NEC and 1099-MISC threshold to $2,000 per payee for the year, the first change to that number since it was set in 1954. From tax year 2027 on, the $2,000 figure itself gets adjusted annually for inflation. The mechanics stay the same once you cross the line: pay a contractor $1,900 across 2026 and you owe no 1099-NEC. Pay them $2,100, and you report the full $2,100, not just the $100 over the threshold.

The 1099-K threshold for payment apps reversed too

The same bill undid a separate, lower threshold that had been phasing in for third-party payment networks. Instead of dropping toward $600 as previously scheduled, the 1099-K threshold for platforms like PayPal, Venmo Business, and Stripe reverts to $20,000 and 200 transactions a year, the standard that applied before 2022, and it applies retroactively back to 2022. Practical effect for an agency: if you paid a contractor $9,000 through Stripe this year, neither Stripe nor you is required to issue a form for it. Keep your own records anyway. The IRS doesn't need the paperwork to come looking if a contractor's income doesn't match what shows up elsewhere, and a contractor who disputes what you reported, or didn't report, is a conversation you'd rather not have in March. For agencies that pay a lot of freelancers through a platform's built-in payout system rather than writing checks, this reporting gap is wider than it was two years ago, not narrower, so don't assume the payment app has it covered.

January 31 deadlines, with no automatic extension

Form 1099-NEC has to go to both the contractor and the IRS by January 31. Unlike some other information returns, there's no automatic 30-day extension available for 1099-NEC, whether you file on paper or electronically. If you're mailing paper forms to the IRS, Form 1096 goes with them as the transmittal summary. Build this into your monthly bookkeeping checklist in December, not as a scramble on January 30. Pulling contractor totals out of twelve months of transactions in a single sitting is exactly the kind of task that produces an incorrect number.

What a missed deadline actually costs

The IRS runs a four-tier penalty structure per form, adjusted for inflation most years, so confirm the current figures before you budget around them. As of the current schedule: $60 per form if you file within 30 days of the deadline, $130 per form if you file after that but by August 1, $340 per form if you file after August 1 or don't file at all, and $680 per form, with no annual cap, if the IRS determines the failure was intentional. These multiply fast. An agency that missed 12 contractor 1099s and filed 60 days late is looking at 12 times $340, or $4,080, before any late-payment interest on the underlying tax.

1099 filing requirements: a checklist before January 31

First, collect a signed W-9 from every contractor before the first payment goes out, not after. Second, tally total 2026 payments per contractor by method, excluding anything paid by card or through a payment app. Third, confirm entity type from that W-9 so you're not issuing forms to S-corps that don't need them, or skipping attorneys who always need one. Fourth, check whether your combined information returns for the year, 1099s plus W-2s plus anything else, hit 10 forms; if they do, the IRS requires every one of them to be filed electronically, not just the 1099s, through the free IRIS portal. Fifth, furnish copies to contractors and file with the IRS by January 31, and keep a dated record that you did. This is the same discipline that underpins 1099 contractor bookkeeping generally, and it pairs with the state-level exposure we cover in sales tax on digital marketing services, another compliance deadline that catches agencies off guard.