1099-NEC vs 1099-K: What Freelancers Get for 2026

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If you freelance, the forms that show up in January depend mostly on how clients paid you. Clients who pay by bank transfer or check may send a Form 1099-NEC. Payment apps, marketplaces and card processors may send a Form 1099-K. Both thresholds changed recently, and for 2026 the 1099-NEC one went up from $600 to $2,000. Here is how it works now.

The short version

Either way, the IRS is clear on one point: you must report all of your business income, whether or not a form was sent.

Form 1099-NEC and the new $2,000 threshold

A business files Form 1099-NEC for each person it paid at least $2,000 during 2026 for services, if that person isn't its employee. The IRS says the threshold was $600 for payments made before 2026 and is $2,000 for payments made in 2026, and it may be adjusted for inflation starting in 2027. The change comes from the 2025 tax law the IRS cites as P.L. 119-21.

What this means for you:

• A client that paid you $1,500 in 2026 generally won't send a 1099-NEC. That $1,500 is still taxable income you report.
• Clients usually don't file 1099-NECs for payments to a corporation, so if your business is an LLC taxed as an S or C corporation, you may not get one at all.
• Personal payments aren't reportable. Only payments made in the course of the client's trade or business count.
• If you don't give a client your taxpayer ID (usually on Form W-9), they may have to backup-withhold from your payments, and they file a 1099-NEC for that withholding regardless of the amount.

Form 1099-K and the $20,000 / 200-transaction rule

Payment apps and online marketplaces, which the IRS calls third-party settlement organizations, must send a Form 1099-K when the payments you received for goods or services through their platform total over $20,000 in more than 200 transactions. They're allowed to send one below that, so you might get a form for smaller amounts anyway. Card processors are different: if clients pay you directly by credit, debit or gift card, you get a 1099-K from your processor no matter how many payments or how much.

The 1099-K shows gross payments. It isn't reduced for processing fees, refunds, credits, shipping or discounts, so your records matter. Those amounts are not taxable income and you can deduct them from the gross figure.

Can the same payment show up on both?

It shouldn't. The IRS instructions say payments made by card or through a third-party network are reported on Form 1099-K by the payment company and not on Form 1099-NEC or 1099-MISC. So a client who pays you through a payment app or by card shouldn't also send a 1099-NEC for that money. In practice, mistakes happen. If a client sends a 1099-NEC for money you also see on a 1099-K, don't add both to your income. Use your own records to report the real total once, and keep notes showing how the forms overlap.

Where it goes on your return

If you're a sole proprietor or single-member LLC taxed as one, the IRS says freelancers report 1099-K and 1099-NEC income on Schedule C (Form 1040), along with income no form covered, such as cash or direct transfers under the threshold. Your Schedule C profit is also what self-employment tax and your quarterly estimated tax payments are based on.

What to do if a form is wrong

• Wrong amount, wrong ID, or a form you shouldn't have received (for example, it includes gifts or repayments from friends and family): contact the issuer listed as "Filer" on the form and ask for a corrected form. The IRS says it can't correct a 1099-K for you.
• Don't wait to file. The IRS says to file on time even if you can't get a corrected form, and explains how to report an incorrect 1099-K amount on Schedule 1.
• Mark personal payments as non-business in payment apps when you can, so they're less likely to be counted.

A simple system so the forms never surprise you

1. Run all client money through one business bank account, so your deposits are the single source of truth.
2. Invoice from one tool (see our invoicing app comparison) so you have a per-client total for the year.
3. In January, list every 1099 you receive next to your per-client totals and note which payments came by card or app.
4. Report your real total once on Schedule C, then subtract fees and other expenses.

Tools that help

Keeper (affiliate link) is built for 1099 earners: it connects to your bank and cards to track income and find write-offs, and its tax plans include federal and state filing. Pricing is listed on our estimated taxes guide. If you'd rather do it yourself, the invoicing and bookkeeping apps in our Wave vs FreshBooks comparison give you per-client income reports to match against your forms.

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