1099s for Architecture and Engineering Firms: The New $2,000 Threshold and What to Fix Before January

QUICK ANSWER

For payments made in 2026, an architecture or engineering firm files Form 1099-NEC only for payees it paid $2,000 or more, up from $600. Subconsultants are usually the largest group affected. Before January, collect a W-9 from every subconsultant, check that each payment is coded to the right vendor and project, and confirm how your returns will be filed electronically, because the IRS FIRE system closes on November 19, 2026. The 2026 forms are due Monday, February 1, 2027.

Year-end in an architecture or engineering firm already means closing December, reviewing work in progress and setting next year’s rates. The 1099 work lands on top of it in the same few weeks. This year the rules changed in three places. None of the changes is hard to handle in October. All of them are harder in January.

Robert Nevarez of Pacific Coast Advisors LLC described the difference in a testimonial on our site: “It’s also so easy to give my accountant what she needs at the end of the year. I used to dread that time because of all of the work I had to do.” That is the January to aim for with your 1099s.

What changed for 2026 1099s?

Three things changed for 2026: Form 1099-NEC and most Form 1099-MISC boxes now apply only to payees paid $2,000 or more, up from $600, and electronic filers move from the IRS FIRE system to IRIS. The Form 1099-K threshold is also back to more than $20,000 and more than 200 transactions.

The $2,000 threshold covers payments made after December 31, 2025, so it governs the forms you file in early 2027. The IRS will adjust it for inflation starting in 2027. A higher threshold means fewer forms. It does not mean less record keeping, because in March you cannot tell which payees will cross $2,000 by December.

Payment apps and online marketplaces only have to issue one when payments to a payee exceed $20,000 across more than 200 transactions. The part that matters for your own filing runs the other way. If you paid a subconsultant by credit card, the card company reports that payment on Form 1099-K, and it stays off your Form 1099-NEC. Code card payments so your system can tell them apart.

Do I need to send a 1099 to a subconsultant?

Usually yes, if you paid the subconsultant $2,000 or more in 2026 for services, by check or bank transfer rather than by card, and the subconsultant is not a corporation. Payments to corporations, including LLCs taxed as C or S corporations, generally need no form, although legal fees are an exception.

For most architecture and engineering firms, subconsultants are the largest group of payees who might need a form. Structural, MEP, civil, survey and landscape consultants come in every shape: incorporated firms, partnerships, single-member LLCs and sole proprietors. Memory is not a reliable guide to which is which. The W-9 is, because it records each payee’s federal tax classification.

California adds a rule the federal change did not touch. The Employment Development Department requires businesses to report independent contractors who are individual sole proprietors on Form DE 542, within 20 days of paying them $600 or more or signing a contract for $600 or more. The EDD’s own page still shows $600.

What should my firm fix in October?

Fix two things in October: missing W-9s, and subconsultant payments coded to the wrong place. Both are quick to fix while the subconsultant still answers email and the project is still open, and slow to fix in January, when every firm is asking for the same paperwork at once.

Start with a list of every vendor paid for services in 2026 and check it against the W-9s on file. Request the missing ones now. For next year, adopt a simple rule: no W-9, no first payment. A payee who will not provide a taxpayer identification number can trigger backup withholding at 24 percent, which now also applies from $2,000. That is a cash and paperwork problem nobody wants in January.

Then check the coding. Every subconsultant invoice should go through accounts payable, against the right vendor, posted to the project and phase it belongs to. A manual check coded to an overhead account may still land on the right 1099, but it puts the cost on the wrong line of your project reports. Project coding is not a 1099 rule. It is a profit rule. Net multiplier is gross billings minus subconsultant costs, divided by direct labor cost, so an invoice posted to the wrong project makes one project look better than it is and another look worse. Neither error shows up on a 1099. Our project accounting guide covers these metrics in more depth.

In Deltek Ajera, the Vendor 1099 Preparation report shows the 1099 amounts paid to each vendor for the year. It pulls from vendor invoices, vendor payments and bank register entries, flags vendors with no tax ID, and shows whether a W-9 has been received. Run it year-to-date in October and work through the exceptions. In January, Ajera’s Form 1099-NEC report asks for a minimum reporting amount: $600 for 2025 forms, $2,000 for 2026 forms. The same checks apply in Deltek Vantagepoint and QuickBooks. Our earlier article on year-end readiness in Ajera covers the setup decisions that sit alongside them.

How will we file 1099s after FIRE closes?

Through IRIS, because the IRS FIRE system takes its last filings on November 19, 2026, at 3 p.m. Eastern. Tax year 2026 returns filed electronically go through IRIS, either sent by a provider that transmits for you or filed directly through the IRS IRIS Taxpayer Portal, which is free and accepts up to 100 returns at a time.

Most firms with staff must file electronically. The rule is 10 or more information returns in a year, counted across form types, and Forms W-2 count toward it. A firm with eight employees and three subconsultant 1099s files eleven returns and must e-file.

What you do next depends on who presses send. If a payroll company, a filing service or Ajera’s built-in e-filing partner files for you, ask them to confirm in writing that they will file through IRIS. If your firm files directly, you need an IRIS Transmitter Control Code. It is a different code from a FIRE code, and the IRS says the application may take up to 45 days.

What should happen between now and February 1?

Work through the months in order: W-9s and coding in October, the filing route before FIRE closes in November, clean-up in December and the forms in January. The deadline is Monday, February 1, 2027, because January 31 falls on a Sunday, and there is no automatic extension for Form 1099-NEC.

When	What to do	Owner
October	Request missing W-9s. Run the Vendor 1099 Preparation report year-to-date. Fix missing tax IDs and subconsultant costs posted to overhead or the wrong project.	Accounting lead
By November 19	Confirm the filing route: written IRIS confirmation from your provider, or an IRIS Transmitter Control Code if you file directly.	Owner and accounting lead
November and December	Separate card payments, which belong on Form 1099-K. File California DE 542 within 20 days for any new sole-proprietor contractor paid $600 or more. Refer unclear payees to your CPA.	Accounting lead, CPA
Early January	Close December. Run the Form 1099-NEC report with the 2026 minimum of $2,000 and check it against the preparation report.	Accounting lead
By Monday, February 1, 2027	File Forms 1099-NEC and W-2 and furnish recipient copies. No automatic extension.	Owner sign-off

Questions about your tax return, or about whether a specific payment is reportable, belong with your CPA. The work in this table is the part that sits with the firm: records that are complete, coded and ready when your CPA asks for them.

Frequently asked questions

NEXT STEP

Book a year-end readiness call. Summit Business Advisors LLC, West Los Angeles, works with owners of architecture and engineering firms on project accounting, monthly close and controller-level support. On the call we review your vendor records, subconsultant coding and filing route, and tell you what to fix before January.

summitadvisorsla.com/contact-us/