# Information returns: payment method, exempt payees, the payor Governs `form1099::vendor_1099_report`'s payment-instrument classification (card and third-party-network payments go on Form 1099-K, not 1099-NEC/MISC), its per-vendor "not reportable" reasons, and who the payor is when a member pays a company bill personally. Companion to `irs-1099-thresholds.md`. ## Pub. L. 119-21 (H.R. 1, July 4, 2025), §70433 Source: Retrieved: 2026-10-20 SHA-256 of the retrieved file (`plaw-119publ21.htm`): `84000b07c382db50ead04ce65b70983e2dcd699a931d80cd3d2edac584e9004d` The `<>` is the Government Publishing Office's margin note, as printed. Retrieved again 2026-10-21, with the same SHA-256, for subsections (a) to (e); the statute's line breaks are joined and its page marker (`[[Page 139 STAT. 244]]`, after (a)) left out; its ``…'' quotation marks are as printed. **§70433 (heading)** > SEC. 70433. INCREASE IN THRESHOLD FOR REQUIRING INFORMATION REPORTING WITH RESPECT TO CERTAIN PAYEES. **§70433(a)** > (a) In General.--Section 6041(a) is amended by striking ``$600'' and inserting ``$2,000''. **§70433(b)** > (b) Inflation Adjustment.--Section 6041 is amended by adding at the end the following new subsection: > ``(h) Inflation Adjustment.--In the case of any calendar year after 2026, the dollar amount in subsection (a) shall be increased by an amount equal to-- > (1) such dollar amount, multiplied by > (2) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, determined by substituting `calendar year 2025' for `calendar year 2016' in subparagraph (A)(ii) thereof. > > If any increase under the preceding sentence is not a multiple of $100, such increase shall be rounded to the nearest multiple of $100.''. **§70433(c)** > (c) Application to Reporting on Remuneration for Services.--Section 6041A(a)(2) is amended by striking ``is $600 or more'' and inserting ``equals or exceeds the dollar amount in effect for such calendar year under section 6041(a)''. **§70433(d)** > (d) Application to Backup Withholding.--Section 3406(b)(6) is amended-- > (1) by striking ``$600'' in subparagraph (A) and inserting ``the dollar amount in effect for such calendar year under section 6041(a)'', and > (2) by striking ``Only Where Aggregate for Calendar Year Is $600 or More'' in the heading and inserting ``Only Where in Excess of Threshold''. **§70433(e)** > (e) Conforming Amendments.-- > (1) The heading of section 6041(a) is amended by striking ``of $600 or More'' and inserting ``Exceeding Threshold''. > (2) Section 6041(a) is amended by striking ``taxable year'' and inserting ``calendar year''. **§70433(f)** > (f) <> Effective Date.--The amendments made by this section shall apply with respect to payments made after December 31, 2025. ## Treas. Reg. §1.6041-1 (eCFR, up to date as of 2026-10-19) Source: Retrieved: 2026-10-20 SHA-256 of the retrieved file (`ecfr-1.6041-1.xml`): `a27ab6bfd44679e1b68d794f0ac2e202db10df6d07e9925b6a2c069d85b58ff2` **(a)(1)(i)** > (a) General rule—(1) Information returns required—(i) Payments required to be reported. Except as otherwise provided in §§ 1.6041-3 and 1.6041-4, every person engaged in a trade or business shall make an information return for each calendar year with respect to payments it makes during the calendar year in the course of its trade or business to another person of fixed or determinable income described in paragraph (a)(1)(i) (A) or (B) of this section. For purposes of the regulations under this section, the person described in this paragraph (a)(1)(i) is a payor. **(a)(1)(iv)** > (iv) Information returns required under section 6050W for calendar years beginning after December 31, 2010. For payments made by payment card (as defined in § 1.6050W-1(b)(3)) or through a third party payment network (as defined in § 1.6050W-1(c)(3)) after December 31, 2010, that are required to be reported on an information return under section 6050W (relating to payment card and third party network transactions), the following rule applies. Transactions that are described in paragraph (a)(1)(ii) of this section that otherwise would be subject to reporting under both sections 6041 and 6050W are reported under section 6050W and not section 6041. For provisions relating to information reporting for payment card and third party network transactions, see § 1.6050W-1. Solely for purposes of this paragraph, the de minimis threshold for third party network transactions in § 1.6050W-1(c)(4) is disregarded in determining whether the transaction is subject to reporting under section 6050W. **(e)(1)** > (e) Payment made on behalf of another person—(1) In general. A person that makes a payment in the course of its trade or business on behalf of another person is the payor that must make a return of information under this section with respect to that payment if the payment is described in paragraph (a) of this section and, under all the facts and circumstances, that person— > > (i) Performs management or oversight functions in connection with the payment (this would exclude, for example, a person who performs mere administrative or ministerial functions such as writing checks at another's direction); or > > (ii) Has a significant economic interest in the payment (i.e., an economic interest that would be compromised if the payment were not made, such as by creation of a mechanic's lien on property to which the payment relates, or a loss of collateral). **(e)(2)** > (2) Determination of payor obligated to report. If two or more persons meet the requirements for making a return of information with respect to a payment, as set forth in paragraph (e)(1) of this section, the person obligated to report the payment is the person closest in the chain to the payee, unless the parties agree in writing that one of the other parties meeting the requirements set forth in paragraph (e)(1) of this section will report the payment. ## Treas. Reg. §1.6041-2 (eCFR, up to date as of 2026-10-19) Source: Retrieved: 2026-10-20 SHA-256 of the retrieved file (`ecfr-1.6041-2.xml`): `757ff54afc739e52963c9d7d41ea71ffb5c53c37b854a214349bf86db4541551` **(a)(1), first sentence** > (a)(1) In general. Wages, as defined in section 3401, paid to an employee are required to be reported on Form W-2. ## Treas. Reg. §1.6041-3 (eCFR, up to date as of 2026-10-19) Source: Retrieved: 2026-10-20 SHA-256 of the retrieved file (`ecfr-1.6041-3.xml`): `fc79d8bd578b3c152222c20a45000005354eb17bd20c4aa2f0f955020d359d7e` **Introductory text** > Returns of information are not required under section 6041 and §§ 1.6041-1 and 1.6041-2 for payments described in paragraphs (a) through (q) of this section. See § 1.6041-4 for reporting exemptions regarding payments to foreign persons. **(c)** > (c) Payments of bills for merchandise, telegrams, telephone, freight, storage, and similar charges. **(p)(1) through (p)(5)** > (p) Payments made to the following persons: > > (1) A corporation described in § 1.6049-4(c)(1)(ii)(A), except with respect to payments made to a corporation after December 31, 1997 for attorneys' fees, and except a corporation engaged in providing medical and health care services or engaged in the billing and collecting of payments in respect to the providing of medical and health care services. However, no reporting is required where payment is made to a hospital or extended care facility described in section 501(c)(3) which is exempt from taxation under section 501(a) or to a hospital or extended care facility owned and operated by the United States, a State, the District of Columbia, a possession of the United States, or a political subdivision, agency or instrumentality of any of the foregoing. For reporting requirements as to payments by cooperatives, and to certain other payments, see sections 6042, 6044, and 6049 and the regulations thereunder in this part. > > (2) An organization exempt from taxation under section 501(a), as described in § 1.6049-4(c)(1)(ii)(B)(1), or an individual retirement plan, as described in § 1.6049-4(c)(1)(ii)(C). > > (3) The United States, as described in § 1.6049-4(c)(1)(ii)(D). > > (4) A State, the District of Columbia, a possession of the United States, or any political subdivision of any of the foregoing, as described in § 1.6049-4(c)(1)(ii)(E). > > (5) A foreign government or political subdivision of a foreign government, as described in § 1.6049-4(c)(1)(ii)(F). ## Treas. Reg. §1.6041-4 (eCFR, up to date as of 2026-10-19) Source: Retrieved: 2026-10-20 SHA-256 of the retrieved file (`ecfr-1.6041-4.xml`): `38ab0107a87144ae1512665cc85cbb8c35271efd9b43e8e4b898ce9c8cabc280` **(a)(1), first sentence** > Returns of information are not required for payments that a payor can, prior to payment, reliably associate with documentation upon which it may rely to treat as made to a foreign beneficial owner in accordance with § 1.1441-1(e)(1)(ii) or as made to a foreign payee in accordance with § 1.6049-5(d)(1) or presumed to be made to a foreign payee under § 1.6049-5(d)(2), (3), (4), or (5). ## Treas. Reg. §1.6049-4 (eCFR, up to date as of 2026-10-19) Source: Retrieved: 2026-10-20 SHA-256 of the retrieved file (`ecfr-1.6049-4.xml`): `e37af99c7d0bdba9508d5f9033c044cc784be3761a1a504e1e5b13abb8ea9ab5` **(c)(1)(ii)(A)** > (A) Corporation. A corporation, as defined in section 7701(a)(3), whether domestic or foreign, is an exempt recipient. In addition, for purposes of this paragraph (c)(1), the term corporation includes a partnership all of whose members are corporations described in this paragraph (c)(1), but only if the partnership files with the payor a certificate stating that each member of the partnership meets one of the requirements of paragraph (c)(1)(ii)(A) (1) through (4) of this section. Absent actual knowledge otherwise, a payor may treat a payee as a corporation (and, therefore, as an exempt recipient) if one of the requirements of paragraph (c)(1)(ii)(A) (1), (2), (3), or (4), of this section are met before a payment is made. > > (1) The name of the payee contains an unambiguous expression of corporate status that is Incorporated, Inc., Corporation, Corp., P.C., (but not Company or Co.) or contains the term insurance company, indemnity company, reinsurance company, or assurance company, or its name indicates that it is an entity listed as a per se corporation under § 301.7701-2(b)(8)(i) of this chapter. > > (2) The payor has on file a corporate resolution or similar document clearly indicating corporate status. For this purpose, a similar document includes a copy of Form 8832, filed by the entity to elect classification as an association under § 301.7701-3(b) of this chapter. > > (3) The payor receives a Form W-9 which includes an EIN and a statement from the payee that it is a domestic corporation. > > (4) The payor receives a withholding certificate described in § 1.1441-1(e)(2)(i), that includes a certification that the person whose name is on the certificate is a foreign corporation. ## Treas. Reg. §1.6050W-1 (eCFR, up to date as of 2026-10-19) Source: Retrieved: 2026-10-20 SHA-256 of the retrieved file (`ecfr-1.6050W-1.xml`): `e533e6c24836a89ad117207da3dc44f0a0fc5df22a8e39cb8afd7ea8d1f1665a` **(a)(5)(i)** > (5) Participating payee—(i) Definition. In general, the term participating payee means any person, including any governmental unit (and any agency or instrumentality thereof), who: > > (A) In the case of a payment card transaction, accepts a payment card (as defined in paragraph (b)(3) of this section) as payment; and > > (B) In the case of a third party network transaction, accepts payment from a third party settlement organization (as defined in paragraph (c)(2) of this section) in settlement of such transaction. **(b)(1)** > (b) Payment card transactions—(1) Definition. The term payment card transaction means any transaction in which a payment card, or any account number or other indicia associated with a payment card, is accepted as payment. **(b)(3)** > (3) Payment card—(i) The term payment card means any card, including any stored-value card as defined in paragraph (b)(4) of this section, issued pursuant to an agreement or arrangement that provides for— > > (A) One or more issuers of such cards; > > (B) A network of persons unrelated to each other, and to the issuer, who agree to accept such cards as payment; and > > (C) Standards and mechanisms for settling the transactions between the merchant acquiring entities and the persons who agree to accept the cards as payment. > > (ii) Persons who agree to accept such cards as payment as described in this paragraph (b)(3) are participating payees within the meaning of paragraph (a)(5)(i)(A) of this section. **(b)(4)** > (4) Stored-value cards. The term stored-value card means any card with a prepaid value, including any gift card. **(b)(5)(i) and (ii)** > (5) Transactions for which no return of information is required under section 6050W—(i) Withdrawals and cash advances. The use of a “payment card” as defined in paragraph (b)(3) of this section by a cardholder to withdraw funds at an automated teller machine, or to obtain a cash advance or loan against the cardholder's account, is not a payment card transaction under paragraph (b)(1) of this section because the card is not being accepted as payment by a merchant or other payee. > > (ii) Convenience checks. The acceptance of a check issued in connection with a payment card account by a merchant or other payee is not a payment card transaction under paragraph (b)(1) of this section because the check is accepted and processed through the banking system in the same manner as a traditional check, not as a payment card. **(c)(1)** > (c) Third party network transactions—(1) Definition. The term third party network transaction means any transaction that is settled through a third party payment network. **(c)(2)** > (2) Third party settlement organization. The term third party settlement organization means the central organization that has the contractual obligation to make payments to participating payees (as defined in paragraph (a)(5)(i)(B) of this section) of third party network transactions. A central organization is a third party settlement organization if it provides a third party payment network (as defined in paragraph (c)(3)(i) of this section) that enables purchasers to transfer funds to providers of goods and services. **(c)(3)** > (3) Third party payment network. (i) The term third party payment network means any agreement or arrangement that— > > (A) Involves the establishment of accounts with a central organization by a substantial number of providers of goods or services who are unrelated to the organization and who have agreed to settle transactions for the provision of the goods or services to purchasers according to the terms of the agreement or arrangement; > > (B) Provides standards and mechanisms for settling the transactions; and > > (C) Guarantees payment to the persons providing goods or services in settlement of transactions with purchasers pursuant to the agreement or arrangement. > > (ii) A third party payment network does not include any agreement or arrangement that provides for the issuance of payment cards. > > (iii) Persons who are providers of goods and services as described in this paragraph (c)(3) are participating payees within the meaning of paragraph (a)(5)(i)(B) of this section. **(c)(4)** > (4) Exception for de minimis payments. A third party settlement organization is required to report any information under paragraph (a)(1) of this section with respect to third party network transactions of any participating payee only if— > > (i) The amount that would otherwise be reported under paragraph (a)(1)(ii) of this section with respect to such transactions exceeds $20,000; and > > (ii) The aggregate number of such transactions exceeds 200. ## Treas. Reg. §301.7701-2 (eCFR, up to date as of 2026-10-19) Source: Retrieved: 2026-10-20 SHA-256 of the retrieved file (`ecfr-301.7701-2.xml`): `24815816ed81423ccb332a34a108015d0ee2f29bb1a25a743328cd9eaa313e26` **(b)(1) and (2)** > (b) Corporations. For federal tax purposes, the term corporation means— > > (1) A business entity organized under a Federal or State statute, or under a statute of a federally recognized Indian tribe, if the statute describes or refers to the entity as incorporated or as a corporation, body corporate, or body politic; > > (2) An association (as determined under § 301.7701-3); ## Treas. Reg. §301.7701-3 (eCFR, up to date as of 2026-10-19) Source: Retrieved: 2026-10-20 SHA-256 of the retrieved file (`ecfr-301.7701-3.xml`): `d7fc6976edc288a34d26d458d101f707f2d0ac63820fd1c908bf5feef3fa0e56` **(c)(1)(iii), first four sentences** > (iii) Effective date of election. An election made under paragraph (c)(1)(i) of this section will be effective on the date specified by the entity on Form 8832 or on the date filed if no such date is specified on the election form. The effective date specified on Form 8832 can not be more than 75 days prior to the date on which the election is filed and can not be more than 12 months after the date on which the election is filed. If an election specifies an effective date more than 75 days prior to the date on which the election is filed, it will be effective 75 days prior to the date it was filed. If an election specifies an effective date more than 12 months from the date on which the election is filed, it will be effective 12 months after the date it was filed. ## 26 U.S.C. §6050N(a) (royalties) Source: Retrieved: 2026-10-21 SHA-256 of the retrieved file (`usc6050n.html`): `becb9609580ad82de7038feb7f279551a266849d6cc48d7517b34ef7cd9c70d0` **(a)** > (a) Requirement of reporting Every person— (1) who makes payments of royalties (or similar amounts) aggregating $10 or more to any other person during any calendar year, or (2) who receives payments of royalties (or similar amounts) as a nominee and who makes payments aggregating $10 or more during any calendar year to any other person with respect to the royalties (or similar amounts) so received, shall make a return according to the forms or regulations prescribed by the Secretary, setting forth the aggregate amount of such payments and the name and address of the person to whom paid. ## Treas. Reg. §1.6045-5 (eCFR, up to date as of 2026-10-19) Source: Retrieved: 2026-10-21 SHA-256 of the retrieved file (`ecfr-1.6045-5.xml`): `a7d4a8096c45165526d2d24785304e91a66d07be5142c81567743055a28e6d3e` **(a)(1), first sentence** > Except as provided in paragraph (c) of this section, every payor engaged in a trade or business who, in the course of that trade or business, makes payments aggregating $600 or more during a calendar year to an attorney in connection with legal services (whether or not the services are performed for the payor) must file an information return for such payments. **(c), lead-in, and (c)(4)** > (c) Exceptions. Notwithstanding paragraphs (a) and (b) of this section, a return of information is not required under section 6045(f) with respect to the following payments: > > (4) Payments made by a person to the extent that the person is required to report with respect to the same payee the payments or portions thereof under section 6041(a) and § 1.6041-1(a) (or would be required to so report the payments or portions thereof but for the dollar amount limitation contained in section 6041(a) and § 1.6041-1(a)). ## Instructions for Form 1099-K (Rev. December 2026) Source: Retrieved: 2026-10-20 SHA-256 of the retrieved file (`i1099k.html`): `f692039fa0fd9b3a3c5224ddd0f74f5c2efec5ef7cf0dcd74727fed665a1c2f7` **Specific Instructions: payment settlement entity, and Note** > A PSE is a domestic or foreign entity that is a merchant acquiring entity, that is, a bank or other organization that has the contractual obligation to make payment to participating payees in settlement of payment card transactions; or a TPSO, that is, the central organization that has the contractual obligation to make payments to participating payees of third party network transactions. > > Healthcare networks, in-house accounts payable departments, and automated clearing houses do not qualify as TPSOs and do not report under section 6050W. **Specific Instructions: participating payee** > A participating payee is any person, including any governmental unit (and any agency or instrumentality of a governmental unit) who accepts a payment card, or any account number or other indicia associated with a payment card, as payment or accepts payment from a TPSO in settlement of a third party network transaction. **Specific Instructions: payment card** > A payment card is any card, including any stored-value card (having prepaid value, including gift cards), issued according to an agreement or arrangement that provides for all of the following. > > One or more issuers of the cards. > > A network of persons unrelated to each other, and to the issuer, who agree to accept the cards as payment. > > Standards and mechanisms for settling the transactions between the merchant acquiring entities and the persons who agree to accept the cards as payment. **Specific Instructions: third party payment network** > A third party payment network is any agreement or arrangement that provides for the following. > > The establishment of accounts with a central organization by a substantial number of providers of goods or services who are unrelated to the organization and who have agreed to settle transactions for the provision of the goods or services to purchasers according to the terms of the agreement or arrangement. > > Standards and mechanisms for settling the transactions. > > Guarantee of payment to the persons providing goods or services (participating payees) in settlement of transactions with purchasers pursuant to the agreement or arrangement. > > A third party payment network does not include any agreement or arrangement that provides for the issuance of payment cards. **Reporting under sections 6041, 6041A, and 6050W** > Payments made by payment card or through a third party payment network after December 31, 2010, that otherwise would be reportable under sections 6041 (payments made in the course of a trade or business to another person) or 6041A(a) (payments of remuneration for services and certain direct sales) and 6050W are reported under section 6050W and not section 6041 or 6041A. For purposes of determining whether payments are subject to reporting under section 6050W, rather than section 6041 or 6041A, the de minimis threshold, discussed later under Box 1a, is disregarded. ## IRS, "Understanding your Form 1099-K" (page last reviewed or updated 28-Jun-2026) Source: Retrieved: 2026-10-20 SHA-256 of the retrieved file (`understanding-1099k.html`): `23f1d27b4b4a5bd103bf2468a056d291aca8b5bcfeca06d1d5272ce1f4dba86d` **Introduction** > Form 1099-K is a report of payments you received for goods or services during the year from: > > Credit, debit or stored value cards such as gift cards (payment cards) > > Payment apps or online marketplaces, also called third party settlement organizations or TPSOs **Who gets Form 1099-K** > If your customers or clients pay you directly by credit, debit or gift card, you'll get a Form 1099-K from your payment card processor no matter how many payments you got or how much they were for. **Personal payments from family and friends** > Money you received from friends and family as a gift or repayment for a personal expense should not be reported on a Form 1099-K. These payments aren't taxable income. > > Be sure to note these types of payments as non-business in the payment apps when possible. ## Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026) Source: Retrieved: 2026-10-20 SHA-256 of the retrieved file (`i1099mec.html`): `2c674f7851fd137245a5a3acc8e182e2eaa11fa9f5ea09cf5c380006dd5dc5e8` The Form 1099-K paragraph (under Reminders) still opens with the sentence quoted in `irs-1099-thresholds.md`, word for word (same 12/2026 revision); it is not repeated here. **Form 1099-MISC: Reportable payments to corporations** > The following payments made to corporations must generally be reported on Form 1099-MISC. > > Cash payments for the purchase of fish for resale reported in box 11. > > Medical and health care payments reported in box 6. > > Substitute payments in lieu of dividends or tax-exempt interest reported in box 8. > > Gross proceeds paid to an attorney reported inbox 10. **Form 1099-MISC, Box 6: Medical and Health Care Payments (second paragraph)** > The exemption from issuing Form 1099-MISC to a corporation does not apply to payments for medical or health care services provided by corporations, including professional corporations. However, you are not required to report payments made to a tax-exempt hospital or extended care facility or to a hospital or extended care facility owned and operated by the United States (or its territories), a state, the District of Columbia, or any of their political subdivisions, agencies, or instrumentalities. **Form 1099-NEC: Reportable payments to corporations** > The following payments made to corporations must generally be reported on Form 1099-NEC. > > Attorneys’ fees reported inbox 1a. > > Payments by a federal executive agency for services (vendors) reported inbox 1a. **Form 1099-NEC: Payments to corporations for legal services** > The exemption from reporting payments made to corporations does not apply to payments for legal services. Therefore, you must report attorneys’ fees (in box 1a of Form 1099-NEC) or gross proceeds (in box 10 of Form 1099-MISC) as described earlier to corporations that provide legal services. **Form 1099-NEC: Payments made on behalf of another person** > For payments reportable under section 6041, if you make a payment on behalf of another person who is the source of the funds, you may be responsible for filing Form 1099-NEC. You are the payor for information reporting purposes if you perform management or oversight functions in connection with the payment, or have a significant economic interest in the payment (such as a lien). For example, a bank that provides financing to a real estate developer for a construction project maintains an account from which it makes payments for services in connection with the project. The bank performs management and oversight functions over the payments and is responsible for filing information returns for payments of $2,000 or more paid to contractors. For more information, see Regulations section 1.6041-1(e). **Form 1099-NEC: Exceptions** > Some payments do not have to be reported on Form 1099-NEC, although they may be taxable to the recipient. Payments for which a Form 1099-NEC is not required include all of the following. > > Generally, payments to a corporation (including an LLC) that is treated as a C or S corporation). However, see Reportable payments to corporations , earlier. > > Payments for merchandise, telegrams, telephone, freight, storage, and similar items. > > Payments of rent to real estate agents or property managers. However, the real estate agent or property manager must use Form 1099-MISC to report the rent paid over to the property owner. See Regulations section 1.6041-3(d); Regulations section 1.6041-1(e)(5), Example 5; and, the instructions for box 1a. > > Wages, any bonuses, prizes, and awards paid to employees (report these on Form W-2). > > Military differential wage payments made to employees while they are on active duty in the U.S. Armed Forces or other uniformed services (report on Form W-2). > > Business travel allowances paid to employees (may be reportable on Form W-2). > > Cost of current life insurance protection (report on Form W-2 or Form 1099-R). > > Payments to a tax-exempt organization including tax-exempt trusts (IRAs, HSAs, Archer MSAs, Coverdell ESAs, and ABLE (529A) accounts), the United States, a state, the District of Columbia, a U.S. territory, or a foreign government. > > Compensation for injuries or sickness by the Department of Justice as a PSO disability or survivor’s benefit, or under a state program that provides benefits for surviving dependents of a PSO who has died as the direct and proximate result of a personal injury sustained in the line of duty. > > Compensation for wrongful incarceration for any criminal offense for which there was a conviction under federal or state law. See section 139F, certain amounts received by wrongfully incarcerated individuals. **Form 1099-MISC: Exceptions, first item** > Generally, payments to a corporation (including a limited liability company (LLC) that is treated as a C or S corporation). However, see Reportable payments to corporations , earlier. ## Derived (wanderbooks) - **Cards and networks go on 1099-K.** A payment made by payment card or through a third party payment network that §6041 would otherwise cover is reported under §6050W on Form 1099-K, by the payment settlement entity, and not under §6041, so it does not go on Form 1099-NEC or 1099-MISC (§1.6041-1(a)(1)(iv); the 1099-K instructions extend this to §6041A). For this test the third party network de minimis of §1.6050W-1(c)(4) (more than $20,000 and more than 200 transactions) is disregarded, so the exclusion holds below it. A payment card is any card, including a stored-value card, meaning any card with a prepaid value, gift cards included (§1.6050W-1(b)(3)(i), (b)(4)). The regulation does not name credit or debit cards; the IRS page names credit, debit and stored-value cards as payment cards. The rule covers payments made after December 31, 2010. - **The card must be accepted by the payee.** A payment card transaction is one in which the card, or its number or other indicia, is accepted as payment (§1.6050W-1(b)(1)); the participating payee is the person who accepts the card as payment ((a)(5)(i)(A), (b)(3)(ii)). The regulation's own exclusions turn on that test: an ATM withdrawal or cash advance is not a payment card transaction because the card is not being accepted as payment by a merchant or other payee ((b)(5)(i)), and neither is a convenience check, which is processed through the banking system ((b)(5)(ii)). So a card that only funds a transfer which the payee does not accept as a card payment is not a payment card transaction with that payee. The texts do not name card-funded transfers; this rests on (b)(1), (a)(5)(i)(A) and (b)(3)(ii), with (b)(5) as the regulation's examples. If the payee instead accepts payment from a third party settlement organization, the transaction is a third party network transaction ((a)(5)(i)(B), (c)(1) to (c)(3)). - **ACH is not a TPSO.** Automated clearing houses do not qualify as third party settlement organizations and do not report under §6050W (1099-K instructions, Note). A plain ACH transfer (no card, no TPSO) is therefore not a §6050W transaction, and §1.6041-1(a)(1)(iv) does not take it off Form 1099-NEC/MISC. - **Not reportable under §6041** (§1.6041-3, introductory text): payments of bills for merchandise, telegrams, telephone, freight, storage, and similar charges ((c)); and payments to: - a corporation ((p)(1)), except attorneys' fees paid after December 31, 1997 and a corporation providing, or billing and collecting for, medical and health care services; even then nothing is reported for a §501(c)(3) tax-exempt hospital or extended care facility, or one owned and operated by the United States, a State, the District of Columbia, a possession, or a political subdivision, agency or instrumentality of any of them; - an organization exempt from tax under §501(a), or an individual retirement plan ((p)(2)); - the United States ((p)(3)); - a State, the District of Columbia, a possession of the United States, or a political subdivision of any of them ((p)(4)); - a foreign government or a political subdivision of one ((p)(5)); - a foreign payee or foreign beneficial owner, when the payor holds documentation it may rely on before paying (§1.6041-4(a)(1)). Wages paid to an employee go on Form W-2 (§1.6041-2(a)(1)). The 1099-MISC/NEC instructions count an LLC treated as a C or S corporation as a corporation, and list payments to corporations that stay reportable: cash for fish bought for resale (1099-MISC box 11), medical and health care payments (box 6), substitute payments in lieu of dividends or tax-exempt interest (box 8), gross proceeds paid to an attorney (box 10), attorneys' fees (1099-NEC box 1a), and payments by a federal executive agency for services (1099-NEC box 1a). - **Treating a payee as a corporation.** Absent actual knowledge otherwise, a payor may treat a payee as a corporation if, before payment, its name carries Incorporated, Inc., Corporation, Corp., or P.C. (Company or Co. does not count), or the payor has a corporate resolution or similar document on file (a copy of a Form 8832 association election counts), or a Form W-9 with an EIN stating it is a domestic corporation, or a foreign-corporation withholding certificate (§1.6049-4(c)(1)(ii)(A)(1) to (4)). - **The payor.** The payor is the person engaged in a trade or business who makes the payment in the course of it (§1.6041-1(a)(1)(i)). A person who pays on behalf of another is the payor only if it performs management or oversight functions in connection with the payment or has a significant economic interest in it; mere administrative or ministerial functions, such as writing checks at another's direction, are not management or oversight (§1.6041-1(e)(1)(i), (ii)). If two or more qualify, the one closest in the chain to the payee reports unless they agree in writing otherwise ((e)(2)). The quoted texts do not name a member paying the company's bill from personal funds; under (e)(1) a member who only makes the payment at the company's direction is not the payor. - **Corporate status by election.** An entity organized under a Federal or State statute that describes it as incorporated or as a corporation is a corporation, and so is an association as determined under §301.7701-3 (§301.7701-2(b)(1), (2); see `irs-entity-classification.md`). An election on Form 8832 takes effect on the date the form specifies, or on the date filed if it specifies none; the date can be no more than 75 days before nor more than 12 months after filing, and a date outside that range is moved to the limit (§301.7701-3(c)(1)(iii)). - **What §70433 changed.** It raised the §6041(a) amount from $600 to $2,000 ((a)), indexed it for calendar years after 2026 in a new §6041(h), each increase rounded to the nearest $100 ((b)), made §6041A(a)(2)'s nonemployee-compensation threshold the §6041(a) amount in effect for the calendar year ((c)) and §3406(b)(6)'s backup-withholding amount the same ((d)), and made §6041(a) count by calendar year ((e)(2)). So the $2,000 holds for Form 1099-NEC (§6041A(a)(2)) and for the 1099-MISC payments reported under §6041(a) (its "rent, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable gains, profits, and income": `irs-1099-thresholds.md`) alike. It changed neither §6050N(a)'s $10 for royalties nor §1.6045-5(a)(1)'s $600 for payments to an attorney in connection with legal services (gross proceeds, 1099-MISC box 10), which leaves out what §6041(a) already reports, or would but for its dollar amount ((c)(4)): attorneys' fees for the payor's own legal work are §6041's, at its amount. The texts quoted here don't say whether payments a payee gets on both forms add up toward one threshold. - **Dates.** §1.6041-1(a)(1)(iv) governs payments made after December 31, 2010. The amendments of Pub. L. 119-21 §70433 (the $2,000 threshold, `irs-1099-thresholds.md`) apply to payments made after December 31, 2025 (§70433(f)).