What happens if a landlord files 1099-NECs late or not at all

The deadline and the threshold

The instructions for Forms 1099-MISC and 1099-NEC say that section 6071(c) requires you to file Form 1099-NEC on or before January 31, and that you must also furnish the payee statement by January 31. For tax years beginning after 2025, the minimum threshold for nonemployee compensation is $2,000. Payments of that amount or more in the course of your rental business to someone who is not your employee are reportable, with exceptions such as payments to a corporation, which generally are not.

Personal payments are not reportable. The instructions say Forms 1099-MISC and 1099-NEC apply only to payments made in the course of a trade or business. Your preparer decides whether your rental activity is a business for this purpose. The post on who gets a 1099-NEC goes through the usual cases.

The penalty tiers for 2026

The IRS publishes the amounts on its information return penalties page. For returns due in 2026, the amount per return depends on how late you file:

The IRS says the penalty applies separately to each information return and to each payee statement, so failing to file with the IRS and failing to give the contractor a copy are counted separately. It also says the maximum is different for small and large businesses and that there is no maximum for intentional disregard. Publication 1099 and the instructions have the details.

Example a made-up landlord paid three contractors $2,000 or more and filed all three 1099-NECs on February 20, which is within 30 days of January 31. At $60 each, the penalty is $180 for the returns filed with the IRS, and the same landlord also owes the penalty for payee statements that were late. Check: three returns times $60 is $180 per set.

What to do if you missed it

1. Make the list now: every contractor you paid $2,000 or more last year, with the total, using your books, not memory.
2. Get a Form W-9 from anyone who does not have one on file (see collecting W-9s).
3. File the forms as soon as you can. The tiers go up with time, and the first tier covers filing within 30 days.
4. Give the contractor their copy.
5. If a notice arrives, read it and answer by the date on it. The IRS lets you explain reasonable cause, and your preparer can help.

Filing late is cheaper than not filing. The top tier applies to returns never filed.

How to stop it happening next January

• Ask for a W-9 before the first payment, not at year end.
• Code every contractor payment to a vendor, so one report shows totals per vendor.
• Check the vendor totals in December while there is time to collect a missing W-9.
• Put January 31 in your calendar with a reminder in mid-January.

Rent paid to a property manager or agent is reported by them, not by you as the payer in most cases. The instructions also cover rent reported on Form 1099-MISC. Ask your preparer about your own facts.

How DoorKeeping handles it

DoorKeeping produces the 1099-NEC report from the books, with each vendor's total for the year and whether a W-9 is on file. It does not e-file 1099s with the IRS, so your preparer or a filing service files them. Ask Claude or ChatGPT in December which vendors are over the threshold and missing a W-9.

Sources

1. IRS, Instructions for Forms 1099-MISC and 1099-NEC, read Oct 30, 2026
2. IRS, Information return penalties, read Oct 30, 2026

Questions

When is Form 1099-NEC due?

January 31, for both the IRS and the contractor.

What is the 1099-NEC threshold for 2026?

$2,000 of nonemployee compensation for tax years beginning after 2025, according to the IRS instructions.

What is the penalty for filing a 1099-NEC late?

For returns due in 2026: $60 within 30 days, $130 after that through August 1, and $340 after August 1 or if never filed.

Does the penalty apply per contractor?

Yes. The IRS says it applies separately to each information return and each payee statement.