New 1099 Reporting Rules in the “One Big Beautiful Bill”
Published on October 2, 2025
Last summer, Congress passed the “One Big Beautiful Bill.” Inside it were two major changes that directly impact how small businesses, including those in the green industry, handle tax reporting.
Independent Contractors (Form 1099-NEC / 1099-MISC)
The IRS has long required businesses to issue 1099s to independent contractors once payments exceeded $600 in a year. That low threshold has caused headaches for decades.
The new law raises the threshold beginning in 2026:
✅ This means that starting in 2026 you won’t need to issue 1099s for small, one-off jobs. For example, if a nursery pays a contractor $1,200 for seasonal pruning, no 1099 is required under the new threshold.
The new law raises the threshold beginning in 2026:
- Old rule: $600
- New rule (2026): $2,000, indexed to inflation
✅ This means that starting in 2026 you won’t need to issue 1099s for small, one-off jobs. For example, if a nursery pays a contractor $1,200 for seasonal pruning, no 1099 is required under the new threshold.
Payment Apps (Form 1099-K)
The bill also resets the rules for third-party payment networks like Venmo, PayPal, and Cash App.
In recent years, there was confusion over whether even small transactions would trigger 1099s. The new law clarifies and restores the old standard:
✅ For TNLA members, this means using PayPal to pay a supplier a few times won’t generate a new 1099-K from PayPal. Only businesses with a high volume of app-based transactions will see 1099-Ks.
In recent years, there was confusion over whether even small transactions would trigger 1099s. The new law clarifies and restores the old standard:
- Old rule (before 2021): $20,000 and 200+ transactions
- Temporary lowered rule (never fully enforced): $600
- New rule (2026 and beyond): Reverts back to $20,000 and 200+ transactions
✅ For TNLA members, this means using PayPal to pay a supplier a few times won’t generate a new 1099-K from PayPal. Only businesses with a high volume of app-based transactions will see 1099-Ks.
Why It Matters for TNLA Members
- Independent Contractors: Relief from unnecessary forms for small payments.
- Payment Apps: Clarity that casual or occasional payments won’t create tax surprises.
- Future Proofing: The $2,000 contractor threshold will rise with inflation, preventing constant compliance creep.
Takeaway for Members:
Starting in 2026, the 1099 rules will be more practical and less burdensome for small businesses in Texas’ green industry. TNLA will continue to track federal tax updates and keep you informed.