1099-NEC for landlords: when you must file for contractors

Most pages that rank for this question still tell you the threshold is $600, and that number is now wrong for payments you make in 2026. The figure that matters when you sit down in January is $2,000, raised by the 2025 tax law and set to index for inflation after that. That single change quietly pulls a lot of small landlords below the line who used to be over it: the handyman you paid $1,400 across three jobs no longer triggers a form, while the contractor you paid $5,200 to redo a bathroom still does.

But the threshold is the last question, not the first. Before the dollar amount even matters, you have to clear three gates: whether your rental counts as a trade or business at all, whether the vendor is the kind of payee that gets a form, and whether you paid them in a way that puts the reporting on you instead of on a card processor. This guide walks the decision in that order, with the 2026 numbers, so you know by the end of January who needs a 1099-NEC and who does not.

Gate one: is your rental a trade or business?

The 1099-NEC filing duty attaches to a trade or business, and whether a small landlord is one is genuinely unsettled. The Internal Revenue Code section that requires information returns applies to a person engaged in a trade or business, and rental activity sometimes qualifies and sometimes does not, depending on how active and continuous the operation is. A retiree with one passive single-family rental and a property manager doing all the work has a real argument they are not in a trade or business. A self-manager handling leasing, repairs, and the books across several units looks much more like one.

There is no bright-line test here, and reasonable preparers land in different places. The conservative course most CPAs recommend for an active self-manager is to file: an unnecessary 1099-NEC costs you a stamp and an hour, while a required one you skipped runs penalties per form that climb the longer it is late. If your activity is closer to the passive end, this is exactly the kind of fact-specific call to put to your preparer rather than decide from a blog, and it sits inside the wider set of rental property taxes a self-manager has to keep straight. The QBI question turns on a similar trade-or-business line, which is why our guide to the QBI deduction for landlords is worth reading alongside this one.

Gate two: who actually gets a form

Assume you cleared gate one. A 1099-NEC goes to a person or business you paid for services in the course of your rental, but several common payees are carved out. The form is for service providers, not for everyone you wrote a check to. These get a 1099-NEC:

• Unincorporated contractors and tradespeople. The sole-proprietor handyman, the painter operating as an individual, the landscaper who runs an LLC taxed as a sole proprietor or partnership.
• Professional services for the rental. Your attorney always gets one if over the threshold, even if they are a corporation, because legal services are a specific exception to the corporation rule.

These do not:

• Corporations. A vendor organized as a C or S corporation is exempt, with law firms the notable exception. The W-9 tells you the entity type, which is why you collect it before you pay.
• Payments for merchandise. The appliance you bought, the lumber, the paint itself. The 1099-NEC reports services, not goods. When an invoice mixes both, report the labor portion.
• Property managers' pass-throughs and rent. If a management company pays your vendors, they handle the filing, not you. The form follows whoever actually made the payment.

The entity type does most of the sorting, and you cannot know it reliably without the paperwork. A vendor's truck that says “LLC” tells you nothing about how they are taxed.

Gate three: how you paid them

This is the carve-out that catches people. You only report payments made by cash, check, or direct bank transfer. Anything you paid by credit card, debit card, or a third-party payment network such as PayPal business or Venmo for business is reported by the processor on Form 1099-K, and putting it on your 1099-NEC too would double-count the contractor's income.

So when you test a vendor against the $2,000 line, count only the check-and-cash payments. Say you paid a plumber $3,200 during the year but $1,800 of it went on a credit card and $1,400 by check. Only the $1,400 is reportable, which is under the threshold, so no form is due even though the total looks large. Some landlords use this on purpose: paying tradespeople by card shifts the reporting to the processor and takes the January chore off your desk entirely. The tradeoff is card fees a vendor may pass along, so it is a convenience choice, not a rule.

The W-9, collected before you pay

Everything above runs on information you get from one document. Form W-9 is where a contractor gives you their legal name, business name, address, taxpayer identification number, and entity type, which are the precise fields a 1099-NEC requires. Collect it before you pay the first invoice. Chasing a taxpayer ID in late January from a vendor who finished the job in March and stopped returning calls is the part of this that actually goes wrong, and it is entirely avoidable by making the W-9 the first thing you ask for, the way you ask for a quote.

Keep the signed W-9 with that property's files. The entity-type box on it answers your corporation question, the TIN populates the form, and having it on hand in January turns filing from a scramble into data entry. Treat it as part of the same year-end tax package you assemble for everything else.

Filing: the forms, the deadline, the e-file line

When a vendor clears all three gates and the threshold, you issue Form 1099-NEC, one copy to the contractor and one to the IRS, both due January 31. There is no automatic extension on the contractor copy, so this is a hard date, not a soft one. If you paper file, Form 1096 is the cover sheet that summarizes the batch you mail in.

One number changes how you send them. If you are filing 10 or more information returns of all types combined for the year, the IRS requires electronic filing, and that count sweeps in any 1099-INT, 1099-MISC, or W-2 you also issue, not only your 1099-NEC forms. Most small landlords are nowhere near 10 and can paper file with a 1096, but if you run several properties with several tradespeople each, run the count before you assume you can mail them. The thresholds and mechanics live in the General Instructions for Certain Information Returns, which you should skim each year because the indexed figures move.

The part that makes January easy

The whole exercise comes down to knowing two things on January 1: which vendors crossed the threshold in reportable payments, and where their W-9 is. Both are bookkeeping problems, not tax problems, and they are solved during the year, not at the deadline. I close my own books on the 5th of each month, and a 1099 vendor is one more payee I can already see a running total for, with the W-9 attached when the first invoice posts. The same per-vendor discipline that makes this form a non-event is the backbone of ordinary rental property accounting, and it feeds the same Schedule E where your contractor labor lands as a repair or improvement.

That year-round visibility is why I built rents.ai. Its expense records show a year-to-date total per vendor, so the question of who crossed $2,000 in reportable payments is something you can read off a screen instead of reconstruct from receipts, and document storage keeps each W-9 attached to the property file instead of a kitchen drawer. What it will not do is file the form for you: there is no 1099-NEC generation or e-file inside the app, so the totals and the paperwork are organized for the moment you or your CPA actually prepare the return. The form is still your job. Knowing who needs one is the part worth handing off.