Form 1099-NEC for contractors who work on your rentals
If your rental is a trade or business, you generally file Form 1099-NEC for each unincorporated contractor you paid for services during the year, once the total reaches the IRS threshold. That threshold was $600 for payments made in 2025 and is $2,000 for payments made in 2026, filed by January 31, 2027. Collect each contractor's details before the first payment, not in January.
The threshold, by year
| Payments made in | Form 1099-NEC threshold | Due to IRS and contractor | IRS source |
|---|---|---|---|
| 2025 | $600 or more | January 31, 2026 | Instructions for Schedule E (2025), line A |
| 2026 | $2,000 or more | January 31, 2027 | Instructions for Forms 1099-MISC and 1099-NEC (12/2026) |
The December 2026 instructions for Forms 1099-MISC and 1099-NEC say to report nonemployee compensation of $2,000 or more, that the minimum threshold rose to $2,000 for tax years beginning after 2025, and that it may be adjusted for inflation starting in 2027. They set January 31 as the due date both for filing Form 1099-NEC with the IRS and for giving the contractor their copy. The 2025 Schedule E instructions describe the earlier $600 threshold for services by a non-employee.
Thresholds and dates change. Read the instructions for the year you are filing, and ask your tax preparer.
Does this apply to a landlord?
The 1099 instructions say to report only payments made in the course of your trade or business, that personal payments are not reportable, and that you are engaged in a trade or business if you operate for gain or profit. They do not say whether every rental owner meets that test, so whether you must file depends on your facts.
Schedule E asks the question directly. Line A asks whether you made payments that would require you to file Forms 1099, and the instructions say to check Yes if you did. If you own an apartment building to make a profit, settle the answer with your tax preparer before January, not after.
Which payments count
The instructions list four conditions for Form 1099-NEC box 1a: the payment went to someone who is not your employee, it was for services in the course of your trade or business, it went to an individual, partnership, estate or in some cases a corporation, and the total for the year reached the threshold.
| Payment | Usually on a 1099-NEC? | Why |
|---|---|---|
| Plumber who is a sole proprietor, $3,400 for the year | Yes, for 2026 payments | Services by a non-employee, over $2,000 |
| Handyman paid $1,800 in 2026 | No | Under the $2,000 threshold |
| Roofing company that is a corporation | Generally no | Payments to corporations are generally exempt |
| Attorney for an eviction, any entity type | Yes, if over the threshold | The corporation exemption does not apply to legal services |
| Hardware store for parts you install | No | Payments for merchandise are an exception |
| Electrician's bill for labor and the parts used | Yes, the whole amount | Box 1a includes parts or materials used to perform the services |
| Rent paid to your property manager to pass to you | Not by you | The instructions put that report on the manager |
Example a made-up owner paid an unincorporated painter $1,200 in March, $900 in July and $650 in November 2026. No single payment reaches $2,000, but the year's total of $2,750 does, so the owner files one Form 1099-NEC showing $2,750 by January 31, 2027.
Collect the details before the first payment
The hardest part of 1099 season is chasing a contractor in January for a tax ID they never gave you. Make a rule: no first payment until you have the details.
- Ask for a completed Form W-9 with the legal name, business type and tax ID.
- Note in your books whether the vendor is a corporation, an LLC (and how it is taxed) or an individual.
- Record every payment to that vendor under the same vendor name, so the year's total is one report.
- Keep the invoice, especially when it bundles labor and parts.
A January routine
- Run a report of every payment to each vendor for the year, per property or per LLC that paid.
- Drop corporations (except attorneys) and anyone under the threshold.
- Check names and tax IDs against the W-9s.
- File Form 1099-NEC with the IRS and send each contractor their copy by January 31.
- Answer Schedule E lines A and B for each property.
If each building sits in its own LLC, the LLC that paid is the payer. The IRS says a single-member LLC that is disregarded for income tax uses its owner's Social Security number or EIN for income tax reporting (single-member LLCs); ask your tax preparer which name and number go on the form.
How DoorKeeping handles it
DoorKeeping keeps each property's ledger separately, so you can ask your AI app for what each vendor was paid this year, by property. DoorKeeping produces the 1099-NEC report from the books, and you or your tax preparer file the forms. DoorKeeping does not give tax advice.
Sources
- IRS, Instructions for Forms 1099-MISC and 1099-NEC (12/2026), read Oct 29, 2026
- IRS, Instructions for Schedule E (Form 1040), 2025, read Oct 29, 2026
- IRS, Single member limited liability companies, read Oct 29, 2026
Questions
- What is the 1099-NEC threshold for 2026?
- The IRS instructions dated December 2026 say to report nonemployee compensation of $2,000 or more, for tax years beginning after 2025. For payments made in 2025 it was $600.
- When is Form 1099-NEC due?
- January 31 of the year after the payments, both to the IRS and to the contractor, under the current instructions.
- Do I send a 1099-NEC to an LLC contractor?
- It depends on how the LLC is taxed. Payments to corporations are generally exempt, except for legal services, so ask for a W-9, which shows the tax classification.