1099 Reporting Training for Staff: What Your Team Must Know Each January
10/4/2026
Every January, information returns land on whoever in the firm has the time, and that is usually the person with the least training. The work looks clerical: collect vendor data, total payments, generate forms, transmit. Then the penalty notices arrive in the fall, and they are almost never about lateness. They are about wrong payees, mismatched TINs, missing backup withholding and corrections handled the wrong way.
This year has more rule churn than most. The One Big Beautiful Bill Act raised the 1099-NEC and 1099-MISC reporting threshold for the first time in decades, Form 1099-K reporting thresholds reverted, and the Forms 1099-NEC and 1099-MISC picked up new boxes. Staff who learned 1099s from last year's checklist are working from the wrong numbers.
This post sets out what the people who handle your clients' 1099s actually need to know, how to tell whether your team is ready, and which 1099 training webinar fits which person.
What Changed for Payments Made in 2026
The $2,000 threshold for 1099-NEC and 1099-MISC
For payments made after December 31, 2025, the base reporting threshold under section 6041(a) is $2,000, up from the $600 that applied for decades. The IRS instructions for Forms 1099-MISC and 1099-NEC (December 2026 revision, used for 2026 information filed in early 2027) state the new threshold and that it may be adjusted for inflation beginning in calendar year 2027.
What this means for January:
- 2026 payments use the $2,000 threshold. A contractor paid $1,500 in 2026 no longer needs a 1099-NEC on account of that payment alone.
- 2025 payments (filed in early 2026) still used $600. Anyone correcting or late-filing prior-year forms must apply the old number to the old year.
- From 2027 payments, the threshold is $2,000 plus an inflation adjustment. Someone needs to check the indexed figure each year instead of carrying $2,000 forward.
Not every threshold moved
The increase applies to the section 6041 and 6041A payments, not to every box on every form. The 1099-MISC instructions still require reporting of royalties of $10 or more, for example. Payments from which federal income tax was withheld under the backup withholding rules must be reported regardless of amount. Staff who hear "the threshold is now $2,000" and apply it to every box will under-report.
Backup withholding follows the new threshold
The same law raised the aggregate reportable-payment threshold for backup withholding on section 6041(a) and 6041A(a) payments from $600 to $2,000 for 2026. The backup withholding rate itself is still 24%. In practice: a payee without a valid TIN on file who is paid above the threshold triggers both a reporting and a withholding obligation, and the payer is liable for withholding it failed to collect.
New tip boxes on Forms 1099-NEC and 1099-MISC
The December 2026 revisions of both forms add boxes 1b and 13a for cash tips, required under P.L. 119-21, section 70201, and boxes 1c and 13b for the Treasury tipped occupation code. Clients in hospitality, personal services and other tipped industries need to start collecting this information from payees during the year, not reconstruct it in January.
Form 1099-K reverted to $20,000 and 200 transactions
For third-party settlement organizations, the One Big Beautiful Bill Act retroactively restored the pre-2021 rule: no Form 1099-K unless gross payments exceed $20,000 and the number of transactions exceeds 200. The IRS notes that payment card transactions have no threshold, and that the change affects reporting only, not whether income is taxable. Staff answering client questions about "missing" 1099-Ks need to know both points.
The Five Things Every 1099 Preparer Must Know
1. Who gets a form, and who does not
The threshold is the easy part. The judgment calls are which payees are reportable (most payments to corporations are exempt, but attorney payments generally are reportable even to a corporation), which box a payment belongs in (nonemployee compensation on 1099-NEC, rents and other categories on 1099-MISC), and what falls to Form 1099-K instead because it was paid by card or through a payment app. Above all of this is worker classification: issuing a 1099-NEC does not make someone a contractor. Our post on employee vs. independent contractor classification covers that determination.
2. TINs before payment, not after
Most information-return penalties are for incorrect information, and the cause is usually a TIN that was never checked. The process that works:
- Collect a signed Form W-9 before the first payment.
- Use IRS TIN Matching, an e-services tool that lets an authorized payer check name/TIN combinations against IRS records before filing. Pub. 1099 notes that payers who validate before filing should receive fewer backup withholding (CP2100) notices and penalty notices.
- Run the match in November, not in late January, so mismatches can be fixed before the forms are due.
3. B-notices: the 15-business-day clock
When the IRS sends a CP2100 or CP2100A listing missing or incorrect name/TIN combinations, the payer has obligations on a fixed schedule. Per IRS Publication 1281:
- Send the first B-notice, a Form W-9 and an optional reply envelope to the payee within 15 business days of the date of the CP2100/CP2100A or the date you received it, whichever is later.
- If the payee does not provide a corrected, certified TIN, begin backup withholding within the time frame Pub. 1281 sets out.
- A second B-notice for the same account within three calendar years requires the payee to validate the TIN with the issuing agency: a Social Security card for an SSN, or an IRS letter (Letter 147C for an EIN). A new W-9 is not enough.
This is the area where clients most often get hurt, because the CP2100 arrives in the fall, long after the person who prepared the 1099s has moved on to other work.
4. Deadlines and the e-file threshold
The Form 1099-NEC is due to both the recipient and the IRS by January 31, moved to the next business day when that date falls on a weekend or holiday. There is no automatic extension for 1099-NEC; Form 8809 extensions for that form are granted only in limited circumstances. Most other 1099s follow a split schedule, with the recipient copy in January or February and the IRS copy later, and an electronic due date later than the paper one. Our post on 1099 and W-2 filing deadlines covers the full calendar.
The e-file rule catches small clients: a filer with 10 or more information returns in aggregate for the year must e-file, and the count is combined across form types. Four Forms 1098 and six Forms 1099 means e-filing, and if the originals had to be e-filed, so do the corrections. The IRS's Information Returns Intake System (IRIS) lets small filers e-file without buying software, but access has to be set up in advance. Do it in the fall.
5. Corrections
Corrections fail when staff treat them as a new filing. The right method depends on the error: a wrong amount or code is corrected with one corrected return; a wrong payee name or TIN, or a form filed for the wrong form type, needs a different process. A preparer who just files another original creates duplicate reporting that generates more notices. Penalty tiers are lower for errors corrected quickly, so a correction filed in February costs less than one filed in August.
How to Tell Whether Your Team Is Ready
A quick self-audit before the season:
- Can the person preparing 1099s state the 2026 NEC/MISC threshold and the one exception for royalties without looking it up?
- Do your client vendor files have W-9s dated before the first payment?
- Has anyone run TIN Matching for your largest 1099 clients this year?
- Who in the firm opens CP2100 notices, and do they know the 15-business-day rule?
- Does every client with 10 or more returns in aggregate have IRIS or software access in place?
- Does the team know how to correct a wrong TIN, not just a wrong amount?
- Are tipped-industry clients collecting cash tip and occupation-code data now?
If more than one or two answers are "no" or "not sure," training will pay for itself the first time it prevents a round of notices.
Which 1099 Webinar Fits Whom
CPA Training Center carries several webinars on information reporting. Here is how they line up with the roles in a typical firm, based on what each webinar's title says it covers.
The new hire or seasonal preparer
Start with Basics of 1099 Reporting – Form 1099-NEC and 1099-MISC. As the title says, it covers the two forms that make up most small-business filing. Someone who has never prepared a 1099 needs the foundations (who is a reportable payee, which form and box, what the threshold means) before the exceptions. Our post on hiring seasonal tax preparers covers fitting this training into onboarding.
The experienced preparer or reviewer
The Advanced Issues and Updates webinar is for people who already know the forms. With a new threshold, new boxes and indexing starting next year, this is the person who has to update the firm's checklists and answer the hard questions in January, so they should be current on the changes first.
The person who owns TINs and notices
Assign Current Issues in TIN Validation and B Notices to whoever opens the mail in October. The B-notice process is where a short deadline meets real liability for unwithheld tax, and it usually belongs to someone other than the January preparer.
A sensible firm plan: basics for everyone who touches 1099s, advanced for one or two reviewers, and TIN/B-notice training for the person who owns vendor data and notices.
Build It Into the Pre-Season Calendar
The 1099 season starts in the fall: W-9 cleanup and TIN Matching in October and November, IRIS or software access confirmed by December, staff trained before the first client sends a vendor list. Firms that train in January are training during the busiest week of the information-return season.
To put the right training in front of the right people before January 31, start with Basics of 1099 Reporting – Form 1099-NEC and 1099-MISC for the team, then add the advanced and TIN validation webinars for the people who review returns and handle notices.
Frequently Asked Questions
What is the 1099-NEC threshold for 2026?
For payments made after December 31, 2025, the base threshold for reporting nonemployee compensation on Form 1099-NEC, and for most Form 1099-MISC payments, is $2,000, up from $600. It applies to 2026 payments reported in early 2027. Starting with 2027 payments, the $2,000 figure is adjusted for inflation, so check the current instructions each year. Some amounts follow other rules: royalties are still reported at $10 or more, and payments subject to backup withholding are reported regardless of amount.
Who in an accounting firm needs 1099 training?
Anyone who collects vendor information, prepares or reviews information returns, or answers IRS notices. That usually includes bookkeepers, seasonal preparers, the staff accountant who reviews client vendor lists, and whoever handles CP2100 notices in the fall. Each needs a different depth: basics for preparers, current-year changes and difficult cases for reviewers, and TIN validation and B-notice procedures for the person who owns vendor data. Matching the training to the role works better than sending everyone to the same session.
What is a B-notice and how fast must we respond?
A B-notice is the notice a payer sends to a payee after the IRS reports, on a CP2100 or CP2100A, that the payee's name and TIN combination is missing or does not match IRS records. Under IRS Publication 1281, the payer must send the first B-notice with a Form W-9 within 15 business days of the CP2100's date or its receipt, whichever is later. If the payee does not certify a correct TIN, backup withholding at 24% must begin. A second notice requires validation from the SSA or IRS.
Is there an extension for filing Form 1099-NEC?
Not an automatic one. Form 8809 gives an automatic 30-day extension for many information returns, but for Forms W-2 and 1099-NEC no automatic extension is available. An extension for those forms is granted only in limited circumstances. Plan for Form 1099-NEC to reach both the IRS and the recipient by January 31, or the next business day when January 31 falls on a weekend or holiday, and have W-9s and TIN matching done well before then.
Do clients with only a few 1099s have to e-file?
Possibly. A filer that must file 10 or more information returns of any type during the year must e-file, and the count is combined across form types, including Forms W-2. A client with six 1099-NECs and four W-2s is over the line. Small filers can use the IRS's Information Returns Intake System instead of buying software, but access must be set up in advance. If the original returns had to be e-filed, any corrections must be e-filed as well.
Did the Form 1099-K threshold change?
Yes. The One Big Beautiful Bill Act retroactively restored the earlier rule for third-party settlement organizations such as payment apps and online marketplaces: Form 1099-K is required only when gross payments to a payee exceed $20,000 and the payee has more than 200 transactions. Payment card transactions have no threshold. The change affects reporting only. Income from goods or services sold is still taxable whether or not a Form 1099-K is issued, which is worth explaining to clients who did not receive one.
