Form 1099-MISC Reporting Thresholds: $10, $600, and $2,000

Form 1099-MISC has three reporting thresholds for the 2026 tax year: $10 for royalties and certain substitute payments, $600 for cash fish purchases and attorney gross proceeds, and $2,000 for rents, medical payments, prizes, crop insurance, and other miscellaneous income.¹ The $2,000 figure is adjusted for inflation each year, so confirm the current amount before you file rather than relying on memory. And before you reach for a 1099-MISC at all, check that the payment isn’t non-employee compensation: payments to independent contractors and freelancers moved to Form 1099-NEC starting in 2020, and that swap still trips up filers who default to the older form.

The $10 Tier: Royalties and Substitute Payments

Two categories trigger a 1099-MISC at just $10 in annual payments.

Royalties go in Box 2. If you pay someone $10 or more during the year for the use of patents, copyrights, mineral rights, or similar property, you file.² Each recipient is measured separately against the $10 mark.

Substitute payments in lieu of dividends or tax-exempt interest go in Box 8. These arise when a broker lends a customer’s securities and the borrower pays the customer to replace the dividend or interest that would otherwise have been received. Once those substitute payments reach $10 in a year, the broker reports them.³

The $600 Tier: Fish Purchases and Attorney Gross Proceeds

Cash Fish Purchases for Resale (Box 11)

If you’re in the business of buying fish for resale and you pay $600 or more in cash during the year to someone who catches fish, that goes in Box 11. “Fish” here covers all aquatic life, and “cash” is broader than currency: cashier’s checks, bank drafts, traveler’s checks, and money orders all count. A check drawn on your personal or business account does not.⁴

The requirement applies whether the seller is an individual, a partnership, or a corporation. The usual exemption for payments to corporations does not shield fish purchases from reporting.⁴

Gross Proceeds Paid to Attorneys (Box 10)

Box 10 reports gross proceeds of $600 or more paid to an attorney in connection with legal services — but not payments for the attorney’s own services. The everyday example is a settlement: an insurance company pays $100,000 to a claimant’s attorney, and the insurer reports the full $100,000 in Box 10, even though most of that money will pass through to the client.⁴

This is where filers get tangled up. Paying an attorney directly for legal services your business received is a different transaction, and it goes on Form 1099-NEC Box 1, not on the 1099-MISC. Box 10 is strictly for settlement-type proceeds that pass through an attorney on behalf of someone else.⁴ The corporation exemption doesn’t apply to attorney payments either, so law firms organized as corporations get reported the same way.

The $2,000 Tier: Rents, Medical Payments, Prizes, and Crop Insurance

Most payment types on Form 1099-MISC sit under a general threshold that the IRS adjusts for inflation each year. For 2026 that threshold is $2,000.¹

Rents (Box 1)

Business rent payments of $2,000 or more for office space, equipment, land, or other property go in Box 1.¹ Rent on a personal residence doesn’t trigger the form, because it isn’t paid in the course of a trade or business.⁵

Prizes, Awards, and Other Income (Box 3)

Prizes and awards of $2,000 or more go in Box 3, along with other miscellaneous income that doesn’t fit another box. Cash payments from notional principal contracts to individuals, partnerships, or estates also land here at the same threshold.³

Medical and Health Care Payments (Box 6)

Payments of $2,000 or more to physicians, medical corporations, and other health care providers go in Box 6.¹ The corporation exemption does not apply, so professional corporations and other corporate providers get the same treatment as individual practitioners.⁴

Crop Insurance Proceeds (Box 9)

Crop insurance proceeds of $2,000 or more are reported in Box 9.¹ The insurance company files, not the farmer.

Because this tier is inflation-adjusted every year, check the current IRS instructions before you file. A threshold that is $2,000 for 2026 may be higher in later years.

Special Cases That Don’t Fit the Three Tiers

Two categories on the form sit outside the standard threshold structure.

Fishing boat proceeds go in Box 5 with no stated minimum. If you operate a fishing boat that normally has fewer than 10 crew members, you report each crew member’s share of the catch proceeds no matter how small the amount.⁴

Direct sales of $5,000 or more of consumer products for resale go in Box 7. This covers sales made somewhere other than a permanent retail store on a buy-sell or commission basis. You can report these on Form 1099-MISC or Form 1099-NEC, but only on one of the two.³

Payments That Don’t Belong on Form 1099-MISC

Meeting a dollar threshold doesn’t mean the payment belongs on this form. Several common categories get filed elsewhere or not at all.

Non-employee compensation — fees for services rendered by independent contractors, freelancers, and similar workers — goes on Form 1099-NEC, not the 1099-MISC. If you pay a graphic designer or a plumber $600 or more for their work, that’s a 1099-NEC. The same is true for attorney fees you pay for legal services your business actually received; those go in Box 1 of the 1099-NEC.⁴

Payments for merchandise, telephone, freight, and storage are exempt from 1099-MISC reporting no matter how large. Payments to corporations are generally exempt as well, with four exceptions where you still report: fish purchases (Box 11), medical and health care payments (Box 6), substitute payments in lieu of dividends or interest (Box 8), and gross proceeds paid to attorneys (Box 10).⁴ Attorney fees for legal services paid to a law firm organized as a corporation still get reported, but on the 1099-NEC.

Personal payments never trigger the form. Only payments made in the course of a trade or business do.⁵

1
Internal Revenue Service. General Instructions for Certain Information Returns (2026)
2
Office of the Law Revision Counsel. 26 USC 6050N – Returns Regarding Payments of Royalties
3
Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC
4
Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC
5
Internal Revenue Service. About Form 1099-MISC, Miscellaneous Information