How a 1099 for Affiliates Works for 2026 Commission Payments

A 1099 for affiliates is a Form 1099-NEC you file for each US partner you pay $2,000 or more during 2026. The old $600 line still applies to commissions you paid in 2025 and earlier, according to the IRS instructions.

Every rule below comes from IRS pages we read in November 2026, linked in the section that uses it. This is general information and not tax advice. Ask a tax advisor about your own case.

One thing to know first: we make OpenPromoter, an open-source affiliate tool with a 1099 export. The sections cover who gets a form, the $2,000 math, W-9 and W-8BEN forms, the 2027 deadline and a year-end checklist.

When You Need a 1099 for Affiliates

You need a 1099 for affiliates when you pay a US partner $2,000 or more in commissions during 2026. The IRS treats those commissions as nonemployee compensation, and they belong in box 1 of Form 1099-NEC. You file one copy with the IRS and give the partner another by the same date.

The IRS instructions for Forms 1099-MISC and 1099-NEC (revised December 2026) list four conditions. A payment counts as nonemployee compensation when all four are true:

• The partner is not your employee.
• You paid for services in the course of your trade or business.
• The partner is an individual, partnership, estate or in some cases a corporation.
• You paid that partner at least $2,000 during the year.

An affiliate who sends you paying customers fits that description. You are paying for a referral service, and the referral happens inside your business.

Commissions go on the 1099-NEC, the form built for nonemployee compensation. The rest of this guide is about deciding which partners get one and getting the paperwork in before January.

The $2,000 Threshold for 2026 Payments

For tax years beginning after 2025, the IRS raised the 1099-NEC reporting floor from $600 to the $2,000 threshold. That covers every commission you pay a partner in 2026. The IRS instructions add that the figure may be adjusted for inflation from calendar year 2027.

The change comes from the One Big Beautiful Bill Act, Public Law 119-21. The table shows which number applies to which payment year:

Payments made in	1099-NEC threshold
2025 and earlier	$600
2026	$2,000
2027 and later	$2,000 or the inflation-adjusted figure

The test runs per partner and per calendar year. Add up every commission you paid one partner from January 1 to December 31.

If the total reaches $2,000, box 1 shows the full amount paid. It does not show only the part above the threshold.

Use the date the money left your account. A commission a partner earned in December 2025 that you paid in January 2026 counts toward 2026.

Here is an example with round numbers. A partner paid $150 a month in 2026 receives $1,800 in total and needs no 1099-NEC for the year. A partner paid $200 a month reaches $2,400 and does get one.

Watch the partners who cross the line late in the year. Say a partner has received $1,700 by November and a $400 December payout takes them to $2,100. That December payout is the one that makes the form due.

Note: The threshold only decides whether you file a form. What the partner owes on the money is a separate question for them and their own advisor.

A ledger that spans both years needs care with each row. A partner you paid $900 in 2025 needed a form for 2025 under the old $600 rule. The same $900 paid in 2026 needs none.

Partners You Usually Do Not Report

Three kinds of affiliate payments usually fall outside 1099-NEC reporting. Payments to corporations, including LLCs taxed as C or S corporations, are exempt in most cases. Card and third-party network payments go on Form 1099-K, and foreign partners give you a W-8 form.

The 1099-NEC instructions exclude payments to a corporation, including an LLC that is treated as a C or S corporation. The partner's W-9 tells you which tax classification they have.

A single-member LLC that has not chosen corporate tax treatment is a disregarded entity. You report it under its owner.

The IRS General Instructions for Certain Information Returns put the owner's name on the first name line and the LLC's name on the second. The TIN is the owner's SSN, or their EIN if one applies.

The W-9 requester instructions match this. A disregarded LLC checks the box for its owner's tax classification on line 3a and puts the owner's name on line 1.

Payments made by credit card, payment card or a third-party network are reported on Form 1099-K by the payment settlement entity. The same 1099-NEC instructions say those payments are not reported on a 1099-NEC.

As of October 2026, the IRS Form 1099-K page says payment apps report payees with over $20,000 in more than 200 transactions. Whether a PayPal, Wise or Stripe payout counts as a network payment depends on how the money moves. Ask your advisor about each payout rail you use and keep your records split by rail.

Collect a W-9 or W-8BEN Before the First Payout

Collect a Form W-9 from every US affiliate before you pay them anything. The W-9 gives you the legal name, address and taxpayer identification number that the 1099-NEC needs. Foreign affiliates fill in Form W-8BEN as individuals or Form W-8BEN-E as entities in place of the W-9.

The IRS About Form W-9 page says the form is how a payee provides their correct Taxpayer Identification Number (TIN). The current form is the March 2024 revision. The requester instructions also let payees submit Forms W-9 electronically through a system you set up.

Ask for the form at signup and put it in your onboarding when starting a SaaS affiliate program. A partner who has already been paid has little reason to answer your email in late January.

If a partner never gives you a TIN, backup withholding applies to their payments. The IRS backup withholding page puts the current rate at 24 percent. The General Instructions add that any payment you backup withhold on must be reported on the matching Form 1099.

Partners outside the US use the W-8 forms. The IRS About Form W-8 BEN page tells foreign individuals to give the form to the withholding agent or payer.

That payer is you. Keep the W-8BEN or W-8BEN-E on file as the record of why you treated the partner as foreign.

Deadlines and E-Filing for the 2027 Season

Form 1099-NEC for 2026 payments is due on February 1, 2027, both to the partner and to the IRS. The usual date is January 31, but January 31, 2027 falls on a Sunday. IRS rules move a due date that lands on a weekend to the next business day.

The 1099-NEC instructions set one date for both copies. You furnish the payee statement and file with the IRS by January 31.

The General Instructions add that a due date on a Saturday, Sunday or legal holiday moves to the next business day. They also say no automatic extension is available for Form 1099-NEC. Plan on February 1 as a hard date.

If you file 10 or more information returns in a year, you must e-file. The count adds up every type of information return you file. The IRS portal IRIS lets you e-file information returns, and the General Instructions call it a free service.

Late forms cost money per return. For returns due in 2026, the General Instructions list $60 within 30 days, $130 by August 1 and $340 after that or when not filed. The penalties for failing to furnish the partner's copy follow the same tiers.

Your state may want its own copy of each form. Check the rules in the state where your company files.

A Year-End Checklist

A year-end check for affiliate 1099s comes down to seven steps you can run in early January. Open your payout records and W-9 files side by side before you start. Each step maps to one IRS rule covered earlier in this guide.

Work through the steps in order and note any partner you cannot place:

1. Total each partner by payment date: Add every payout from January 1 to December 31, 2026.
2. Split out card and network payments: Ask your advisor which ones a network reports on a 1099-K.
3. Mark partners at $2,000 or more: These partners need a 1099-NEC for 2026.
4. Check every W-9: Match the legal name and TIN against the partner's records. A name that does not match the payout account is also worth a look when preventing affiliate fraud.
5. Skip corporations and valid W-8 forms: Keep the forms that show why each one was skipped.
6. File and send by February 1, 2027: E-file if you have 10 or more information returns.
7. Keep copies for 3 years: The General Instructions say to keep them 4 years if backup withholding was imposed.

How OpenPromoter Handles Affiliate Tax Forms

OpenPromoter collects W-9, W-8BEN and W-8BEN-E forms in the partner portal and exports a 1099 report for each calendar year. It does not file the forms with the IRS. You hand the CSV to your accountant or load it into the filing service you already use.

Partners fill in their form in the partner portal, and tax ids are encrypted at rest.

A US partner paid by PayPal, Wise or by hand needs a W-9 with an SSN or EIN. It has to be on file before a payout takes their yearly total to the threshold. Until then the payout fails with a clear message.

Stripe Connect collects tax details during its own onboarding. The rest of the flow is on the page for affiliate payouts with a 0% fee.

The Payouts > 1099 report button builds a CSV of US partners for the prior year. It lists the legal name, address, masked TIN, box 1 total and whether a 1099-NEC is required.

The threshold follows the payment year. It uses $600 for 2025 and $2,000 for 2026. Exporting full TINs is recorded in the audit log, and the commissions and payouts docs list every column.

Conclusion

A 1099 for affiliates starts at $2,000 for commissions paid in 2026. The old $600 rule still covers 2025 and earlier. Check which year each payment landed in.

Collect a W-9 from US partners at signup and a W-8BEN or W-8BEN-E from foreign ones. Corporations and payments that a network reports on a 1099-K usually stay off your list. Single-member LLCs go under the owner's name and TIN.

The forms for 2026 are due on February 1, 2027. January 31 falls on a Sunday that year. E-file if you send 10 or more returns, and ask your tax advisor about anything this guide leaves open.