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1099-NEC or 1099-K for PayPal, Venmo and card payments

If you paid a contractor by credit or debit card, or through PayPal, Venmo or another payment network as a business (goods and services) payment, you do not put that payment on a 1099-NEC: the card company or network reports it on Form 1099-K, and that holds even when the network files no 1099-K because the contractor is under its $20,000 and 200-transaction threshold. What you paid by check, ACH, wire, Zelle, cash or a personal friends-and-family transfer is yours to report on the 1099-NEC, once it reaches $2,000 for 2026 payments ($600 for 2025).

“Payments made with a credit card or payment card and certain other types of payments, including third-party network transactions, must be reported on Form 1099-K by the payment settlement entity under section 6050W and are not subject to reporting on Form 1099-MISC or Form 1099-NEC.”

Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026) (for 2026 information filed in early 2027; read 8 Oct 2026)

“For purposes of determining whether payments are subject to reporting under section 6050W, rather than section 6041 or 6041A, the de minimis threshold, discussed later under Box 1a, is disregarded.”

Instructions for Form 1099-K (Rev. December 2026) (read 8 Oct 2026)

Prepared for your review, not tax advice.

By how you paid

How you paid the contractorWho reports it
Credit or debit card (Visa, Mastercard, Amex)1099-K, by the card company. Not on yours.
PayPal, Venmo, Stripe, Square or Cash App, as a business (goods and services) payment1099-K, by the network. Not on yours, even if the network files none.
PayPal or Venmo as a personal (friends and family) transferYours: 1099-NEC at $2,000 for 2026 payments ($600 for 2025).
ZelleYours: Zelle moves money bank to bank and does not settle payments as a network.
Check, ACH, wire, bank bill pay, cashYours: 1099-NEC at $2,000 for 2026 payments.

Why the network's threshold does not matter to you

A payment network files a 1099-K only for a payee paid more than $20,000 in more than 200 transactions in the year. A contractor you paid $3,000 through PayPal will usually get no 1099-K at all. That does not move the payment onto your 1099-NEC: the 1099-K instructions say payments by card or through a third party payment network are reported under section 6050W “and not section 6041 or 6041A”, the sections behind the 1099-NEC and 1099-MISC, and that the network's de minimis threshold is disregarded in deciding which applies.

When it is yours after all

A third party payment network is an arrangement where many unrelated providers of goods or services hold accounts with a central organization and have agreed to settle their sales through it. A personal friends-and-family transfer is not a settlement for goods or services, and a bank-to-bank service such as Zelle is not such a network, so those payments are yours to report like a check. If your books record only “PayPal”, look at how each payment was sent before you leave it out.

Split payments

Count only what you paid directly. A photographer paid $2,200 by card and $1,000 by check in 2026 needs no 1099-NEC from you: the $1,000 is under $2,000, and the $2,200 is the card company's. For 2025 payments the same $1,000 would have needed one.

Check your own payees, on your machine: export your QuickBooks or Xero 1099 or vendor-payments report as CSV and run

npx --allow-git=root github:agentwares/iris-1099 vendor-payments.csv

It decides who needs a 1099-NEC or 1099-MISC and why, citing the IRS sentence for each, lists missing W-9s, and writes IRIS Taxpayer Portal CSVs in batches of 100. It makes no network request; TINs stay in the files on your disk and are shown as the last four digits. No file yet? npx --allow-git=root github:agentwares/iris-1099 --demo runs it on invented vendors. Source (MIT).

For bookkeepers: Keep every client's 1099 season — W-9 status, decisions, IRIS batch receipts — in one place.

Not built yet: $15 per client per season, $49 minimum, built only if enough bookkeepers ask by 1 December 2026.

Count me in ($15 per client per season, $49 minimum)

Sources

Other 1099 questions