Apartment owners and managers pay a lot of vendors: painters, plumbers, landscapers, snow removal crews and others. Each year those payments can trigger an information return. The dollar line for that has moved.
What changed
Section 70433 of Public Law 119-21 raised the reporting threshold in Internal Revenue Code section 6041 from $600 to $2,000 for payments made after December 31, 2025. The IRS instructions for Forms 1099-MISC and 1099-NEC reflect it:
- Rents (Form 1099-MISC, box 1): enter amounts of $2,000 or more.
- Nonemployee compensation, meaning payment for services by someone who is not your employee (Form 1099-NEC, box 1a): enter $2,000 or more.
The law also applies the same threshold to backup withholding, and it indexes the $2,000 amount to inflation for calendar years after 2026, rounded to the nearest $100. The IRS instructions say the adjustment may begin in calendar year 2027.
Not every line moved. The instructions still use $600 for gross proceeds paid to an attorney (Form 1099-MISC, box 10).
Who this affects
Owners, management companies and asset managers that file 1099s for vendors, contractors and rent payments. A vendor you paid less than $2,000 in a calendar year no longer triggers a form on that threshold alone.
Effective date
Payments made after December 31, 2025. Forms covering 2026 payments are filed in early 2027.
What owners should do
- Update your accounts payable setup so the reporting flag uses $2,000 for 2026 payments.
- Keep collecting a Form W-9 from new vendors before the first payment. A payee who does not give you a taxpayer identification number can be subject to backup withholding, and the same threshold applies there.
- Keep invoices for small vendors anyway, since the deduction still needs support even when no form is due.
- Watch for the inflation-adjusted amount for 2027.
This is a summary, not tax advice. Your accountant can confirm how this applies to your entities.