OBBBA and the New Information Reporting (1099) Thresholds
July 14, 2025
The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, includes a significant change to the information return reporting threshold for business payments. This change directly affects when businesses must file Form 1099-NEC and Form 1099-MISC for payments made to service providers and vendors.
Under prior law, businesses were required to file information returns for payments totaling $600 or more in a calendar year for certain payments made. This threshold had been in place for decades and was not indexed for inflation.
The OBBBA raises this threshold significantly and introduces inflation indexing, reducing the compliance burden for small businesses and aligning reporting requirements with modern economic realities.
|
Provision |
Pre-OBBBA Law (2025) |
Without OBBBA (Post-TCJA Expiry) |
New Law (OBBBA) |
|
Reporting Threshold |
$600 |
$600 (unchanged) |
$2,000, indexed for inflation |
|
Forms Affected |
1099-NEC, 1099-MISC |
Same |
Same |
|
Effective Date |
N/A |
N/A |
Applies to payments made after Dec. 31, 2025 |
|
Indexing for Inflation |
No |
No |
Yes, starting after 2026 |
|
Rationale |
Reduce underreporting |
Maintain status quo |
Reduce burden on small businesses and modernize thresholds |
Click here to return to Larson & Company's One Big Beautiful Bill Act summaries.
Rick is a Tax Partner at Larson & Company. He specializes in tax planning and preparation for small businesses and fast-growing companies and is a life insurance tax specialist.
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