The One Big Beautiful Bill Act: Impact on 1099 reporting
By Ashley Taylor Anderson●4 min. read●Aug 1, 2025
On July 4, 2025, the One Big Beautiful Bill Act was passed into public law. The 330-page bill introduced a wide range of legislative changes, including some notable tax updates for businesses.
If you’re currently collecting W-9s and issuing 1099s for your company, here’s what you need to know about the bill’s changes to related tax requirements.
What is the One Big Beautiful Bill Act?
The One Big Beautiful Bill Act (BBB) is a sweeping budget reconciliation package. The bill touches on a wide range of issues, from tax cuts to debt limit increases to updated funding and requirements across multiple government programs and agencies.
Specific to businesses, the BBB introduces several tax updates impacting bonus depreciation, expense caps, interest deduction limits, R&D write‑offs, and filing requirements for 1099s.
The good news? These 1099 changes simplify administration going forward, reducing the burden on teams sending payouts on behalf of their company.
What’s changing in 2025 and beyond?
There are three key updates to 1099 filings included in the BBB:
1099-MISC & 1099-NEC reporting threshold increase
Key takeaway: The W-9 / 1099-MISC and 1099-NEC filing threshold is increasing from $600 to $2000
Timing: January 1, 2026
Details: The new threshold applies to any future payments and payments subject to backup withholding. The reporting threshold is now tied to the calendar year instead of the taxable year.
What this means: Only recipients receiving $2000+ will require a 1099 filing.
1099 threshold adjustments for inflation
Key takeaway: 1099-MISC and -NEC minimums will be adjusted for inflation in the future
Timing: 2027 and beyond
Details: The BBB ties 1099 thresholds to the consumer price index (CPI)-based cost-of-living adjustment each year beginning in 2027, with 2026 as the base year. These adjustments will be rounded to the nearest $100 for simplicity.
What this means: The 1099 threshold will likely increase every year.
1099-K de minimis rule changes
Key takeaway: Reverts to the filing threshold that predated new rules introduced by the American Rescue Plan Act (ARPA) in 2021
Timing: Immediate
Details: A third-party settlement organization (TPSO) like PayPal, Venmo, or Zelle now files a Form 1099-K only if gross payments to a payee exceed $20,000 and the number of transactions exceeds 200 in a calendar year.
What this means: TPSOs will issue far fewer 1099-Ks.
Tax impact on businesses
What do all these changes mean for your company’s tax reporting processes?
Lower operational lift: With increased filing thresholds, the BBB cuts down on the number of 1099-MISC, 1099-NEC, and 1099-K forms that need to be issued. For 1099-MISC forms specifically, the House Ways and Means Committee predicts these new requirements will eliminate the need for more than one-third of all paperwork.
Reduced penalty exposure: Since fewer 1099s will be issued in the future, businesses will have less risk of penalties associated with unfiled or incorrect 1099s.
Scalable systems still matter: Enterprises and companies that make large or recurring payouts to individual recipients still need a systematized way to track transactions, capture W-9s, and generate 1099s at scale. The right tools and processes can help your team stay compliant without wasting time on manual work.
Disclaimer: This overview is meant to give you the lay of the land, not replace a proper map. It pulls together key themes and pitfalls we see around reward-related taxes, but it doesn’t cover every twist in the code or your company’s unique facts. Before you rely on anything here, run it past your own tax advisors to be sure you’re handling rewards in a way that’s fully compliant and optimized for your situation.
Summary
The BBB is changing 1099 reporting requirements, reducing the number of tax forms that need to be filed by businesses like yours. Now’s the time to connect with your finance and legal teams to update your processes and procedures ahead of the 2026 filing changes.
Using Tremendous for rewards and incentives? Our platform automatically prompts recipients to complete W-9s when they reach the filing threshold and provides data to support accurate 1099 generation during tax season.
