Big Changes Coming to 1099 E-Filing Requirements in January 2027

A few years ago, companies had to scramble to adjust to the change the IRS made requiring electronic filing for any taxpayer issuing more than 10 information returns. Companies that didn't already have a Transmitter Control Code (TCC) had to rush to apply for one in time to use it and learn how to upload files to the FIRE website. If their TCC didn't arrive in time, companies then had to pivot and either use a third party to file, or risk penalties by filing on paper.

Now that we have all caught our breath, it's time for more substantial changes and these will require preparation, beginning now.

1. The IRS is discontinuing the FIRE website and moving to IRIS. This means some or all of the following action items may apply to you:
   • Do you have a TCC for IRIS? Or only FIRE? Double check in your IRS portal to confirm that you have a TCC for IRIS and if you do not, start the application process today. A FIRE TCC will not work with IRIS. Applying for an IRIS TCC should be very similar to the process of acquiring the FIRE TCC. It will take the IRS up to 45 days to process your application so start as soon as you can (and there could be delays later this year if there is a heavy demand as the transition time approaches).
   • Check with your software provider to make sure they can generate the files in the correct format for IRIS. If they can’t, you will need to consider other options for filing your 2026 forms. If there are software updates you will need to install, or changes needed to your data (such as name formatting), try to get that addressed well before year end.
   • Plan to start your 1099 preparation process as early as you can in January so that you have time to troubleshoot any glitches like login issues or system errors.
2. Form W‑9 was updated in 2024 by the IRS, including clarifications to how single‑member LLCs and foreign persons should complete the form, better reflecting existing reporting requirements.
   • Summer is a great time to review your W-9 process, including making sure all of your vendors have a form on file and are set up correctly in your accounting software.
   • Remind your accounts payable department that payments should never be issued to new vendors before you have a complete, signed W-9 form on file.
3. For the first time in 72 years, since the $600 threshold was first implemented in 1954, 1099 reporting thresholds have been increased to $2,000 for business and non-employee compensation payments and will now be indexed to inflation for each year going forward. The thresholds for other forms such as interest, dividends and direct sales payments remain the same.
   • When you contact your accounting software provider to discuss the change to IRIS, also ask them about software updates that will be needed to address the annual changes to the threshold for future years.
   • If you use custom reports or a manual input for the threshold when processing your forms, be sure to update those.

These are just highlights of the changes coming, and we will communicate any further guidance as it is released.  For now, focus on requesting a TCC now before the big year end rush, gathering updated W-9s and confirming software readiness this summer.