1099-NEC for Oregon contractors who pay subs: the 2026 rules
If you paid subcontractors this year, the forms that report those payments are due at the end of January, the busiest stretch of the slow season. The work is easy in October and miserable in late January, when you are chasing a W-9 from a sub who has changed phone numbers. Two things are different for 2026: the federal reporting threshold went up, and the IRS has finished moving electronic filing to its IRIS system.
What changed for payments made in 2026
The IRS's Instructions for Forms 1099-MISC and 1099-NEC (December 2026 revision) say that for tax years beginning after 2025, the minimum reporting threshold for these payments increased to $2,000, and that it may be adjusted for inflation beginning in 2027. The Oregon Department of Revenue's iWire page describes the change as a raise from $600 to $2,000 and, asked whether Oregon plans to align with it, answers yes. Check that page again before you file.
Who generally gets a 1099-NEC
The IRS says you generally report a payment as nonemployee compensation when all four of these are true:
- You paid someone who is not your employee.
- You paid for services in the course of your trade or business.
- You paid an individual, partnership or estate, or in some cases a corporation.
- Your payments to that payee totaled at least $2,000 during the year.
For contractors, one detail matters: the instructions describe box 1a as services performed by a nonemployee "including parts and materials." A sub's labor-and-materials invoices generally count in full toward the total, not just the labor line.
Common payments that usually do not get one
- Payments to corporations, including an LLC taxed as a C or S corporation, are generally exempt. Payments to attorneys are an exception and are reportable even to corporations.
- Payments for merchandise, freight and storage, so a material purchase at the supply house is generally not reported this way.
- Wages to employees, which go on Form W-2.
- Card and payment-app payments. The IRS says payments made by credit card, and certain third-party network transactions, are reported on Form 1099-K by the payment settlement entity, not by you on a 1099-NEC.
- Personal payments. Only payments made in the course of your business are reportable, which is why a homeowner who pays you for a kitchen does not send you a 1099.
The W-9 tells you the sub's entity type, which is the fastest way to sort who needs a form.
Collect the W-9 before the first check
The IRS describes Form W-9 as the form a payee uses to give its correct taxpayer identification number to the business that has to file an information return. Ask for it when the sub is onboarded, along with the license and insurance checks in our subcontractor onboarding checklist. The 1099 instructions also say that payees who have not furnished a TIN are subject to backup withholding on reportable payments. That is a far bigger hassle than asking for a form up front.
Deadlines for 2026 forms
- Federal. The IRS says you must furnish the recipient's copy and file Form 1099-NEC with the IRS by January 31. If the date falls on a Saturday, Sunday or legal holiday, the due date is the next business day. January 31, 2027 is a Sunday, so the practical deadline is Monday, February 1, 2027.
- E-filing. The instructions say you must e-file if you file 10 or more information returns in total (all types added together). The IRS's online portal for this is IRIS.
- Oregon. The DOR says businesses that issue 1099s must also file them with Oregon electronically through iWire in Revenue Online, and it does not accept other formats. Its deadline for W-2s and 1099-NEC is January 31, following the federal dates. You can request a 30-day extension by emailing iwire.dor@dor.oregon.gov before the due date. The DOR says it may assess penalties of up to $25,000 for not filing electronically or for late, incorrect or incomplete filing.
If you use a payroll service or bookkeeper, ask now whether they file your 1099s with the IRS and Oregon, or only with the IRS.
A year-end routine that avoids the January scramble
- Now: list every sub you paid in 2026 and total the payments to each from your bank and card records.
- Now: request any missing W-9s while the sub is still working with you.
- December: flag every non-corporate sub at or near $2,000 and note anyone paid only by card or payment app.
- Early January: confirm totals through December 31, double-check names and TINs against the W-9s, and file with the IRS and with Oregon.
- Then: send each sub their copy and save confirmations with your tax records.
A 1099 does not make someone a sub
Whether a worker is an independent contractor or an employee depends on the facts, not on the form you send. Oregon's Workers' Compensation Division explains the state test on its independent contractor page, and our guide to reading a CCB license lookup explains exempt and non-exempt status. If a regular "sub" works only for you, on your schedule, with your tools, talk to your accountant before year-end.
See also the Oregon contractor year-end checklist and estimated taxes for Oregon contractors.
An Excel / Google Sheets workbook with an expense log that records the vendor, description, category and amount for every payment. Log each sub payment as you make it, and at year-end filter by vendor to see each sub's total. Also includes income logs, monthly profit, a quarterly tax set-aside tab and a dashboard. An organizing tool, not tax advice.
See it on Gumroad Our own product. We may earn from sales.25 fill-in SOP templates (PDF + editable .docx), including a Vendor Onboarding SOP, so collecting a W-9 and insurance certificate becomes a step nobody skips.
See it on Gumroad Our own product. We may earn from sales.Sources: IRS Instructions for Forms 1099-MISC and 1099-NEC (Rev. 12/2026), IRS: About Form W-9 and Oregon DOR: iWire (W-2 and 1099 reporting), checked Oct 20, 2026.