Form 1099-NEC Changes for the 2026 Tax Year

IRS Updates: Explaining Form 1099-NEC Changes for Processing Year 2027

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For the 2026 tax year, Form 1099-NEC gains three new boxes for reporting cash tips and qualified overtime compensation paid to nonemployees. Total nonemployee compensation, previously box 1, is now reported in box 1a, and the new boxes 1b through 1d break out specific components of that total.

New Box 1b: Cash Tips

Box 1b reports the total amount designated as cash tips included in box 1a. Cash tips include tips paid in cash or charged by customers. Box 1b is a breakout, not a separate payment category: the tip amounts remain part of the box 1a total, and box 1b identifies how much of that total was cash tips.

New Box 1c: Treasury Tipped Occupation Code(s) (TTOC)

Box 1c reports the Treasury Tipped Occupation Code(s) for the payee's tipped occupation(s). The rules for completing it:

• Enter up to two codes based on the occupation(s) the tips were received in.
• If tips were received in more than two occupations, include the code for any two of the three or more occupations in which tips were received.
• If any tips were received in a nonqualifying occupation, then “000” must be input as one of the occupation codes.
• See IRS.gov/TTOC for the applicable codes.

New Box 1d: Overtime Compensation

Box 1d reports the total amount of qualified overtime compensation included in box 1a. Qualified overtime compensation is compensation paid to an individual required under section 7 of the Fair Labor Standards Act (FLSA) of 1938 that is more than the regular rate at which the individual is paid. For example, only the “half” portion of “time-and-a-half” compensation would be reported in box 1d.