January 7, 2026
As discussed in previous newsletters (Dec 16 and Dec 23), effective January 1, 2026, the Internal Revenue Service has increased the general reporting threshold for most payments on Form 1099-NEC (Nonemployee Compensation) and 1099-MISC (Miscellaneous Information), from $600 to $2,000.
As a result, for reportable payments made to non-employees in Calendar Year 2026, CU will issue the appropriate IRS form if the aggregate amount paid to a non-employee is $2,000 or more during 2026. (There is no change to the $10 reporting threshold for certain types of payments, such as royalties.)
What does this mean for department reporting? CU requirements for internal reporting have changed due to the IRS change, as well as due to changes in internal business processing. Effective January 1, 2026, departments will report various items distributed to non-employees if individual/aggregate distributions exceed $700 in the 2026 calendar year. Previously, the internal, non-employee reporting threshold was $100. Such distributions are reported to the Procurement Service Center (PSC).
The PSC and the OUC have updated four procedural statements to reflect IRS and internal reporting changes:
- PSC Procedural Statement Study Subject Payments
- Finance Procedural Statement Recognition and Training
- Finance Procedural Statement Gift Cards
- Finance Procedural Statement Complimentary Tickets and Related Expenses for Employees and Non-Employees
What stays the same? Payment recipients report taxable income on their own returns even if a 1099 is not issued ... and departments must maintain accurate payment records regardless of reporting thresholds.
Questions? Contact FSS@cu.edu.