A change to 1099 law that came into effect with the new year could mean less paperwork for companies that use subcontractors.

A new federal law known as the One Big Beautiful Bill Act significantly raises the reporting thresholds for several common 1099 forms. The changes apply to payments made after Jan.1 and will affect the forms you file for the 2026 tax year this time next year.

For painting contractors who use independent subcontractors, the most important change is that the long-standing $600 reporting threshold for 1099 forms is being increased to $2,000. Under the new law, Form 1099-NEC will only be required if you pay someone $2,000 or more over the course of the year.

This should reduce the number of forms small contractors are required to issue, and relieve the burden for businesses that work with subs on smaller or one-off jobs.

Note: Subcontractors are still required to report all income they earn, and the IRS still expects businesses to maintain accurate records of every payment they make. The change is that you, the business owner, are no longer required to deliver the form to subcontractors unless you pay them more than $2,000 annually.

Even with higher thresholds, painting contractors should continue tracking all payments to subcontractors. Good records protect you if questions arise later and make tax preparation easier.