Blog
Key Changes to 1099 Reporting in 2025: What CFOs and Investment Managers Need to Know
PINE Advisor Solutions | 19 September 2025
The landscape for 1099 reporting is shifting significantly in 2025, driven by the One Big Beautiful Bill Act (OBBBA). For CFOs and investment managers, these changes aren’t just procedural—they reshape reporting thresholds, governance obligations, and the way payments to vendors, contractors, and investors are tracked. Understanding these developments now will help finance leaders adjust systems, reduce compliance risk, and communicate proactively with stakeholders.
Rising Thresholds and Reduced Form Volume
The most publicized change is the restoration of the Form 1099-K threshold to $20,000 and 200 transactions, rolling back the $600 rule that caused widespread alarm. In addition, starting in 2026, the Form 1099-NEC and 1099-MISC thresholds will jump from $600 to $2,000, with automatic inflation adjustments thereafter. For CFOs and investment managers, this means fewer small-dollar 1099s cluttering reporting pipelines. Finance departments will spend less time generating forms for minor transactions but must still maintain internal records for tax compliance and potential audits.
New Codes, Boxes, and E-Filing Obligations
Beyond thresholds, forms themselves are changing. Some boxes on Form 1099-MISC are being reassigned; excess golden parachute payments, for example, move from Box 14 to Box 3 on Form 1099-NEC. New distribution codes on Forms 1099-Q and 1099-R refine how charitable and educational distributions are classified. Meanwhile, the electronic filing threshold has been lowered to 10 forms, making e-filing mandatory for virtually all but the smallest filers. CFOs and investment managers must ensure their accounting systems are updated to reflect new codes and filing channels—manual processes will be increasingly impractical.
Strategic Impact on Financial Operations
For investment managers running multiple funds or portfolios, these changes affect how GP entities, LP investors, and service providers are reported. CFOs must coordinate across legal, compliance, and tax teams to map new thresholds and codes to fund distributions, management fees, and carried interest. Although fewer 1099 forms may be issued, the remaining ones will be scrutinized more closely, and auditors will expect clear governance disclosures. Effective internal controls and vendor communication will be crucial to avoid penalties and maintain investor confidence.
Conclusion
The 2025 1099 reforms reduce the administrative burden for small payments but increase the complexity of form layouts, coding, and e-filing. Operationally, the key is early preparation: update software and workflows, train staff on new codes and thresholds, and proactively communicate changes to investors and vendors. By taking these steps now, finance leaders can turn a potential compliance headache into an opportunity to streamline operations and strengthen transparency.
Rising Thresholds and Reduced Form Volume
The most publicized change is the restoration of the Form 1099-K threshold to $20,000 and 200 transactions, rolling back the $600 rule that caused widespread alarm. In addition, starting in 2026, the Form 1099-NEC and 1099-MISC thresholds will jump from $600 to $2,000, with automatic inflation adjustments thereafter. For CFOs and investment managers, this means fewer small-dollar 1099s cluttering reporting pipelines. Finance departments will spend less time generating forms for minor transactions but must still maintain internal records for tax compliance and potential audits.
New Codes, Boxes, and E-Filing Obligations
Beyond thresholds, forms themselves are changing. Some boxes on Form 1099-MISC are being reassigned; excess golden parachute payments, for example, move from Box 14 to Box 3 on Form 1099-NEC. New distribution codes on Forms 1099-Q and 1099-R refine how charitable and educational distributions are classified. Meanwhile, the electronic filing threshold has been lowered to 10 forms, making e-filing mandatory for virtually all but the smallest filers. CFOs and investment managers must ensure their accounting systems are updated to reflect new codes and filing channels—manual processes will be increasingly impractical.
Strategic Impact on Financial Operations
For investment managers running multiple funds or portfolios, these changes affect how GP entities, LP investors, and service providers are reported. CFOs must coordinate across legal, compliance, and tax teams to map new thresholds and codes to fund distributions, management fees, and carried interest. Although fewer 1099 forms may be issued, the remaining ones will be scrutinized more closely, and auditors will expect clear governance disclosures. Effective internal controls and vendor communication will be crucial to avoid penalties and maintain investor confidence.
Conclusion
The 2025 1099 reforms reduce the administrative burden for small payments but increase the complexity of form layouts, coding, and e-filing. Operationally, the key is early preparation: update software and workflows, train staff on new codes and thresholds, and proactively communicate changes to investors and vendors. By taking these steps now, finance leaders can turn a potential compliance headache into an opportunity to streamline operations and strengthen transparency.