1099-NEC vs 1099-K: Which Tax Forms Freelancers Get in 2026

At FreelanceAtlas, we help freelancers make sense of the money side of the work, including the forms that land in January. This guide covers who sends each form, the One Big Beautiful Bill threshold changes exactly as IRS.gov states them, what Upwork, PayPal and Stripe say they send, state thresholds, the double-reporting trap and how to reconcile it on Schedule C, the January 31 deadline, and what to do when a form is wrong or missing, with two email templates. It pairs with How to Report Freelance Income When You Did Not Get a 1099 and Self-Employment Tax Explained: Where That 15.3% Actually Goes.

This article is general information, not tax advice. Reporting rules changed for 2025 and 2026 and your situation may differ, so check with a CPA or enrolled agent before you file.

1099-NEC vs 1099-K at a Glance

Both forms are information returns: the payer sends one copy to you and one to the IRS. The difference is who the payer is. A 1099-NEC comes from a client. A 1099-K comes from the company that moved the money.

The rule that keeps the two apart is in the IRS Instructions for Forms 1099-MISC and 1099-NEC: “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.”

Form 1099-NEC: What Clients Send and the New $2,000 Threshold

A client files a 1099-NEC when it pays a nonemployee for services “in the course of your trade or business.” The IRS instructions are explicit that “Personal payments are not reportable,” so a neighbor who hires you to redesign a family website does not owe you one. Payments to a corporation, including an LLC taxed as a C or S corporation, are generally exempt too, with exceptions such as legal services.

The threshold changed under the law IRS.gov calls the One, Big, Beautiful Bill. The IRS’s 1099-NEC FAQ now reads: “Report payments totaling $600 ($2,000 for payments made after December 31, 2025) or more during the calendar year in the course of a business to a person who’s not an employee for services.” The current instructions say the $2,000 minimum “may be adjusted for inflation beginning in calendar year 2027,” and Publication 1099 directs payers to IRS.gov/InflationAdjustment for the current figure.

So the forms you received in early 2026, covering 2025 work, used the old $600 line. The forms you receive in early 2027, covering 2026 work, use $2,000. The same instructions apply the new minimum to backup withholding, so a client paying you under $2,000 in 2026 has no reportable payment to withhold from.

The current revision of Form 1099-NEC also looks a little different. Your nonemployee compensation sits in box 1a, and new boxes 1b to 1d cover cash tips, tipped occupation codes and qualified overtime, which feed the new tip and overtime deductions on Schedule 1-A. Box 4 shows any backup withholding, which you claim “on your income tax return as tax withheld.”

Example: Two Clients, Two Outcomes

Say that in 2026 Client A pays you $1,800 by bank transfer for a logo, and Client B pays you $6,500 by bank transfer for a website. Client B must send you a 1099-NEC showing $6,500. Client A is not required to send anything. Your gross receipts from the two are still $8,300, and all $8,300 goes on your Schedule C.

Form 1099-K: What Card Processors, Apps and Marketplaces Send

The IRS’s Form 1099-K FAQs describe it as “an information return used to report payments you received during the year from” payment cards and “Payment apps or online marketplaces for goods or services (TPSOs).” A TPSO is a third party settlement organization; the IRS’s Understanding your Form 1099-K page lists “Freelance marketplace” among the platforms that count.

Here is exactly what IRS.gov says about the threshold, as of September 2026: “The One, Big, Beautiful Bill retroactively reinstated the reporting threshold in effect prior to the passage of the American Rescue Plan Act of 2021 (ARPA) so that third party settlement organizations are not required to file Forms 1099-K unless the gross amount of reportable payment transactions to a payee exceeds $20,000 and the number of transactions exceeds 200.” The IRS fact sheet that announced it, FS-2025-08 from October 2025, explains that under ARPA, TPSOs had to file for any payee with “more than $600 in total payments,” regardless of the number of transactions.

Card payments work differently. The FAQ says: “There is no threshold amount that must be met to receive a Form 1099-K due to payments received through a payment card transaction. Therefore, if you received $0.01 of payments from a payment card transaction, you should receive a Form 1099-K for those payments.” The Understanding page says the same in plain terms: if clients pay you directly by card, “you’ll get a Form 1099-K from your payment card processor no matter how many payments you got or how much they were for.”

What That Means for Your 2025 and 2026 Forms

Both conditions must be exceeded for an app or marketplace to be required to file: more than $20,000 and more than 200 transactions. Publication 1099 for 2026 repeats the test, “Over $20,000 in total amount of payments” and “Over 200 in total number of transactions,” so the same line applies to 2025 forms and to the 2026 forms that arrive in early 2027. Two cautions from the IRS: a TPSO “may still send a Form 1099-K” for lower amounts, and “your state may have a lower reporting threshold.”

What Upwork, PayPal and Stripe Say They Send

Platforms publish their own reading of the rules, and those pages tell you what to expect in your account. As of September 2026:

• Upwork. Its tax help page says US freelancers get a 1099-K for tax year 2025 if they “earned $20,000 USD or more from clients on Upwork (before fees)” and “had at least 200 transactions,” or if Upwork withheld federal tax, or if they live in a lower-threshold state. It says a 1099-K “is the only form Upwork may send you,” and that Upwork does not send 1099-MISC or 1099-NEC forms, “and neither do your clients.” If you do not qualify, your Tax forms section shows “There is no 1099-K for this year” by January 31.
• PayPal. Its 2025 threshold update says “you’ll get a 1099-K if you receive more than $20,000 and 200 transactions” for goods and services. It adds that PayPal withheld 24 percent from certain accounts that were missing tax information, and that it files a 1099-K for any customer subject to backup withholding “regardless of total payments for the year.”
• Stripe. Its 1099-K help page says an account must have “more than 20,000 USD in total gross volume and more than 200 transactions. Both conditions must be met,” with the form in the Dashboard’s Documents section “by January 31st.”

Notice that Stripe’s stated criteria for its accounts and the IRS’s no-threshold rule for card payments do not line up neatly. Do not try to predict the outcome. Check each processor’s tax documents page in late January, and report your income from your own records either way.

State 1099-K Thresholds Below the Federal Line

The IRS warns that “Your state may have a lower reporting threshold for TPSOs, which could result in you receiving a Form 1099-K, even if the total gross payments and transactions did not exceed the federal reporting threshold.” Some examples, each from the source named:

• Illinois. The Illinois Department of Revenue’s Publication 110 (January 2026) requires Forms 1099-K for payees with an Illinois address to be submitted to the state if “the payee has four or more separate transactions, and the cumulative total exceeds $1,000.”
• Vermont, Massachusetts, Virginia and Maryland. PayPal’s update lists these four at “$600 USD in gross payment volume from sales of goods or services in a single calendar year,” regardless of the number of transactions.
• Upwork’s list. Upwork names Arkansas, Illinois, Maryland, Massachusetts, Mississippi, Missouri, Montana, New Jersey, Vermont, Virginia and Washington D.C. as places with a lower threshold, and adds that “This list can change.”

A state-triggered 1099-K does not change your federal tax. It only means a form exists where you might not have expected one, so your Schedule C needs to account for it.

The Double-Reporting Trap When a Client Pays by Card

The IRS says one payment should land on one form. Its FAQ for third party filers answers the question directly: “No, these transactions should not be reported twice,” and when both rules apply, “the transaction should only be reported on Form 1099-K.” Mistakes still happen: a client may total every payment it made to you, including card payments, and print a 1099-NEC anyway.

Here is how that looks. Say you invoice through Stripe in 2026 and collect $48,000 from many clients across 240 card payments, so Stripe issues a 1099-K for $48,000. One of those clients paid you $9,000 by card and also sends a 1099-NEC for $9,000. Your forms add up to $57,000. Your real gross receipts are $48,000.

How to Reconcile It on Schedule C

1. List every form and every payment channel. Pull the processor report, your bank deposits and your invoice list. Numbered invoices, such as those from the FreelanceAtlas invoice generator, make this matching far faster.
2. Match the 1099-NEC to its invoices. If those invoices were paid by card or through an app, the payments belong on the 1099-K only.
3. Ask the client for a corrected 1099-NEC using the template below, and keep the original form and your correspondence. IRS guidance on incorrect 1099-Ks gives the same advice: keep “a copy of the original form and all correspondence with the issuer.”
4. Report gross receipts once. The Schedule C instructions say line 1 should include “amounts properly shown on your Forms 1099-NEC,” and “If the total amounts that were reported in box 1 of Forms 1099-NEC are more than the total you are reporting on line 1, attach a statement explaining the difference.”

In the example, line 1 starts at $48,000, not $57,000. The processing fees inside that $48,000 come off later as an expense.

Subject: Correction needed on your 2026 Form 1099-NEC

Hi [Client contact],

Thank you for sending my 2026 Form 1099-NEC. It shows $[amount] in box 1a. Those invoices ([invoice numbers]) were paid by [card through Stripe / PayPal], and the processor reports card and app payments on Form 1099-K.

The IRS instructions for Forms 1099-MISC and 1099-NEC say these payments “are not subject to reporting on Form 1099-MISC or Form 1099-NEC.” Could you file a corrected 1099-NEC showing $[corrected amount], which covers only my payments by [bank transfer / check]?

I have attached the invoice list with payment methods. Thank you for your help.

[Your name]
[Business name and phone]

Gross Is Not Income: Fees, Refunds and Personal Payments

A 1099-K reports gross. The IRS’s What to do with Form 1099-K page says the gross amount “isn’t adjusted for any” fees, credits, refunds, shipping, cash equivalents or discounts, and that “These items are not taxable income. You can deduct them from the gross amount.” Upwork says the same about its own form: it shows “your total payments received in a year,” not your net earnings.

Say your 2026 Upwork 1099-K shows $30,000, and Upwork’s earnings report shows $3,000 in service fees and a $500 refund you gave a client. Your income before other expenses is $26,500, not $30,000. Schedule C’s line 10 is for “the total commissions and fees for the tax year,” and the rest of your write-offs are in Freelance Tax Deductions: The 2026 Checklist.

Personal money should not be on a 1099-K at all. The IRS says “Money you received from friends and family as a gift or repayment for a personal expense should not be reported on a Form 1099-K.” If it is, ask the issuer for a corrected form “that shows a zero amount.” If no correction comes, fact sheet FS-2025-08 explains how to “zero out the error” on Schedule 1, using a roommate’s $11,000 share of rent as its example. Keep client and personal money apart so this never comes up; How to Get Paid as a Freelancer: Choosing the Right Payment Rails in 2026 covers the setup.

Deadlines: January 31, and February 1 in 2027

Clients and payment companies share the same date for your copy:

• 1099-NEC. The instructions say “You are required to furnish the payee statements and file with the IRS by January 31.”
• 1099-K. Payment companies “must also send a copy to you by January 31.” Publication 1099 gives them until February 28 to file paper returns with the IRS, or March 31 if they file electronically.
• Weekends. If a due date “falls on a Saturday, Sunday, or legal holiday,” the IRS treats the next business day as timely. January 31, 2027 is a Sunday, so 2026 forms are due by Monday, February 1, 2027.

Many forms now arrive electronically. Stripe posts them in its Dashboard, and Upwork lets you download from Reports, then Tax forms, “starting January 31,” or receive one by mail “postmarked by January 31.”

When a Form Is Wrong or Missing

For a 1099-K, go to the source. The What to do page says to request a correction from the issuer named in the “Filer” box in the top left corner, or, if you do not recognize it, the payment settlement entity “identified on the bottom left corner of the form above your account number.” It is also blunt about the IRS’s role: “Don’t contact the IRS. We can’t correct your Form 1099-K.” And it says “Don’t wait to file your taxes. File even if you can’t get a corrected Form 1099-K.”

For a 1099-NEC, the client is the only party that can fix it. IRS Tax Tip 2025-20 says taxpayers missing a form “should contact the employer, payer or issuing agency and request the missing or corrected documents,” and notes that “Most taxpayers should have received their documents by Jan. 31.” Two special cases from the form’s recipient instructions:

• If you believe you were really an employee and cannot get the payer to correct the form, report the amount as wages and complete Form 8919. Independent Contractor vs Employee explains how that line is drawn.
• If the amount is not self-employment income, such as a sporadic activity or hobby, it goes on the “Other income” line of Schedule 1 instead of Schedule C.

A short, specific email gets a missing form faster than a vague one:

Subject: 2026 Form 1099-NEC for [your legal name or business name]

Hi [Client contact],

I am preparing my 2026 return and have not received a Form 1099-NEC from [client company]. By my records, you paid me $[amount] by [bank transfer / check] in 2026 across invoices [invoice numbers].

Could you confirm whether a 1099-NEC was issued, and if so, send a copy to [email] or let me know where to download it? If you need my W-9 again, I can send it through your vendor portal.

Thank you,
[Your name]

If you still have nothing by the time you file, report the income from your records. Do not delay your return waiting for a form you may never get.

No Form Does Not Mean No Tax

Every threshold in this guide is a reporting rule for payers. None of them is a tax exemption for you. The IRS 1099-K FAQ puts it in one line: “All income, no matter the amount, is taxable unless the tax law says it isn’t,” and that includes amounts “not reported on forms, such as payments you receive in cash, property, or services.” The 1099-NEC sits under the same principle: a client paying you $1,800 in 2026 sends no form, and the $1,800 is still income.

The 1099-NEC FAQ also covers what follows. Independent contractors report income “on Schedule C,” most will owe self-employment tax “if their income (net earnings from self-employment) is $400 or more,” and “you may be subject to the requirement to make quarterly estimated tax payments.” Because nobody withholds tax from your invoices once you have given a valid TIN, the cash for those payments has to come from you. Quarterly Estimated Taxes for Freelancers Explained (2026 Guide) walks through the dates and the math.

Conclusion

The 1099-NEC and the 1099-K are two views of the same income from different payers. Clients send the 1099-NEC for direct payments of $2,000 or more in 2026. Card processors send a 1099-K at any amount, and apps and marketplaces send one above $20,000 and 200 transactions, or lower where a state requires it. Your job is to report each dollar once, using your own records as the master copy.

Do this next. Make a list of every client and every payment channel you used in 2026, and note which clients paid by card or app. Watch your inbox and each platform’s tax documents page from late January to February 1, 2027. Match every form to your invoices, send correction requests the same week you spot a duplicate or error, and enter gross receipts once on Schedule C, with fees and refunds taken out as the IRS describes. Then set aside enough for estimated taxes so the next form is a formality.

Key Takeaways

• A client sends Form 1099-NEC for direct payments for services of $2,000 or more in 2026; the threshold was $600 for payments made through December 31, 2025.
• IRS.gov says the One, Big, Beautiful Bill retroactively reinstated the 1099-K test for apps and marketplaces: more than $20,000 and more than 200 transactions, for 2025 and 2026 forms.
• Payment card transactions have no 1099-K threshold, so the IRS says a payment of $0.01 by card should appear on a 1099-K.
• Card and app payments belong on Form 1099-K only, and the IRS says they “should not be reported twice” on a 1099-NEC as well.
• Form 1099-K reports gross payments before fees and refunds, which you can deduct, and personal payments from friends and family should not appear on it.
• Both forms are due to you by January 31, which moves to Monday, February 1, 2027 for 2026 forms, and all income is taxable whether or not a form arrives.

Frequently Asked Questions

What is the difference between a 1099-NEC and a 1099-K?

A 1099-NEC comes from a client that paid you directly for services in the course of its business, and for 2026 it is required at $2,000 or more. A 1099-K comes from a card processor, payment app or online marketplace that moved the money. Card payments have no threshold, while apps and marketplaces must report above $20,000 and 200 transactions. The IRS says a payment should be reported on only one of them, and card or app payments belong on the 1099-K.

Is the 1099-K threshold $600 or $20,000 for 2025 and 2026?

For apps and marketplaces, it is more than $20,000 and more than 200 transactions. IRS.gov says the One, Big, Beautiful Bill retroactively reinstated that pre-2021 threshold, replacing the $600 rule from the American Rescue Plan Act, and Publication 1099 for 2026 repeats it. Some states set lower thresholds, and a platform may send a form below the federal line. Card payments have no threshold.

What if I get both a 1099-NEC and a 1099-K for the same payment?

Report the income once. The IRS says card and third party network payments are reported on Form 1099-K and “are not subject to reporting on Form 1099-MISC or Form 1099-NEC.” Ask the client for a corrected 1099-NEC, keep the original and your emails, and report your actual gross receipts on Schedule C line 1. If your 1099-NEC totals ever exceed line 1, the Schedule C instructions tell you to attach a statement explaining the difference.

Do I get a 1099-NEC from clients I work with on Upwork?

No. Upwork’s help center says it does not send Forms 1099-MISC or 1099-NEC, “and neither do your clients.” Upwork may send a 1099-K instead, if you meet the federal threshold, had federal tax withheld, or live in a state with a lower threshold. Either way, Upwork reminds US freelancers that they must report all Upwork income on their return.

Do I have to report income if I did not get any 1099?

Yes. The IRS says “All income, no matter the amount, is taxable unless the tax law says it isn’t,” including payments that never appear on a form. The thresholds only decide whether a payer must file. Self-employed freelancers report the income on Schedule C, and most owe self-employment tax once net earnings from self-employment reach $400.