2026 Form 1099-MISC changes: threshold increases and new tip/overtime reporting

The December 2026 IRS instructions change several Form 1099-MISC reporting rules and fields. For many common payment categories, the threshold increases to $2,000, while royalties and certain other categories keep different thresholds. The form also adds dedicated reporting for cash tips, Treasury Tipped Occupation Codes and qualified overtime compensation.

1. Many common 1099-MISC categories now use a $2,000 threshold

The current instructions list $2,000 for rents, prizes and awards, other income, medical and health care payments, crop insurance proceeds, certain section 409A deferrals and nonqualified deferred compensation. Do not apply one threshold to every box: royalties, broker substitute payments, attorney gross proceeds and other categories can have different rules.

2. Royalties and attorney gross proceeds still need form-specific treatment

The instructions continue to list at least $10 for royalties and $600 for gross proceeds paid to an attorney. This is exactly why source systems should classify the payment type before applying a threshold.

3. New box 13a reports cash tips included in box 3

When the special rule applies, box 13a carries the cash tips already included in box 3. Keep the detail amount separate from the total so the filing record can populate both correctly.

4. New box 13b reports Treasury Tipped Occupation Code(s)

The payer reports up to two applicable TTOC codes under the current instructions, with special handling when tips were received in a nonqualifying occupation.

5. New box 14 reports qualified overtime compensation included in box 3

The IRS describes this as the qualified overtime premium amount under the applicable rule, not necessarily total compensation paid for all overtime hours.

6. Direct-sales reporting remains a choice between forms

For qualifying direct sales totaling $5,000 or more, the current instructions allow reporting through Form 1099-MISC box 7 or Form 1099-NEC box 2. Use only one form for that direct-sales indicator.

7. 2026 returns move into the FIRE-to-IRIS transition year

For forms transitioning from FIRE, the IRS says FIRE will stop accepting submissions in November 2026 and IRIS will be the electronic-filing system for the 2027 filing season. Build your 2026 workflow around current IRIS templates/specifications.

What to update before importing 2026 data

• Map each payment category to the correct threshold rather than using one blanket amount.
• Add separate source fields for new tip/TTOC/overtime boxes when applicable.
• Confirm attorney, royalty and direct-sales rules separately.
• Use current address fields and legal name/TIN data.
• Validate the final IRIS CSV or XML against the current tax-year requirements.