Last updated: 13 October 2026 US prop firms report trader payouts to the IRS on Form 1099-NEC, and the threshold for that form changed for 2026. This page sets out the IRS thresholds before and after the change, quoted from IRS instructions, and what three firms say about their own forms.
For payments made in 2026, the IRS threshold for issuing a Form 1099-NEC rose from $600 to $2,000. The IRS instructions say the change applies to tax years beginning after 2025 and may be adjusted for inflation from 2027.
The same $2,000 threshold applies to most Form 1099-MISC boxes, such as other income and prizes. Payments to attorneys stay at $600.
Payment apps and marketplaces (Form 1099-K) report only above $20,000 and more than 200 transactions, per the IRS. Some prop firms pay through platforms such as Rise, which may send their own forms.
A smaller 1099 count does not change what is taxable. The IRS threshold controls whether a payer must file a form, not whether the income is reportable. Topstep, Apex and MyFundedFutures all describe payout recipients as responsible for reporting their own income.
IRS reporting thresholds, 2025 vs 2026
| Form and payment type | Payments in 2025 | Payments in 2026 |
|---|---|---|
| Form 1099-NEC (nonemployee compensation) | $600 or more | $2,000 or more |
| Form 1099-MISC (rents, prizes and awards, other income) | $600 or more | $2,000 or more |
| Form 1099-MISC (gross proceeds paid to an attorney) | $600 or more | $600 or more (unchanged) |
| Form 1099-K (payment apps and online marketplaces) | over $20,000 and more than 200 transactions | over $20,000 and more than 200 transactions |
The first forms under the new threshold will go out in early 2027, for payments made during 2026.
What prop firms say about 1099s
| Firm | What its help page says (checked 13 October 2026) |
|---|---|
| Topstep | Sends Form 1099-NEC by email to US citizens with more than $600 in payouts in a year (2025 forms sent 31 January 2026). No form for non-US citizens. The form shows the gross payout before processing fees. |
| Apex Trader Funding | US taxpayers who received payouts or referral fees receive a Form 1099-NEC, issued through its provider TaxBandits, usually towards the end of January. Members with W-8 status receive no US 1099. |
| MyFundedFutures | Payouts through Rise: 1099 sent by Rise. Payouts by Plaid/ACH bank transfer: 1099 mailed by MyFundedFutures (2025 forms by 17 February 2026). |
Firm pages describe their 2025 process. Topstep’s page still states the $600 level for 2025 forms; none of the three pages we read had been updated to mention the $2,000 threshold for 2026 payments as of 13 October 2026.
Not tax advice
This page summarises IRS reporting rules and firms’ own statements. It is not tax advice. Whether and how prop payouts are taxed depends on your situation and country; ask a qualified tax professional.
Sources
- IRS: Instructions for Forms 1099-MISC and 1099-NEC (12/2026) — “For tax years beginning after 2025, the minimum threshold amount for reporting certain payments… increased to $2,000 and may be adjusted for inflation beginning in calendar year 2027.” Read 13 October 2026.
- IRS: Understanding your Form 1099-K — read 13 October 2026.
- Topstep Help Center: Funded Trader Tax Questions, Apex Trader Funding: 1099 Forms and Tax Information and MyFundedFutures: Your 1099 Tax Documents — all read 13 October 2026.
Method
We quoted thresholds from the current IRS instructions and the IRS Form 1099-K page, and firm statements from each firm’s help centre. The change comes from the 2025 budget law, Public Law 119-21; the IRS instructions describe the new threshold but we have not cited a section number for it.
Caveats
Firms change their processes and payment providers. Check your firm’s help centre and any payment platform you use (such as Rise) for forms.
Thresholds can be adjusted for inflation from 2027. Rules outside the US are different.
How to cite this
Prop Data Lab, “Prop Firm Payouts and 1099 Thresholds”, updated 13 October 2026, https://propdatalab.com/prop-firm-payout-1099-thresholds-2026/
The table and the CSV are free to reuse under CC BY 4.0: copy, chart or republish them, commercial use included, as long as you link back to this page. Thresholds quoted from IRS publications.
Common questions
Do prop firms send a 1099?
Topstep, Apex and MyFundedFutures all say they issue Form 1099-NEC to eligible US traders, directly or through a provider such as TaxBandits or Rise.
What is the 1099-NEC threshold for 2026?
$2,000, up from $600, for payments made in 2026, according to IRS instructions. It may be adjusted for inflation from 2027.
If I get no 1099, are my payouts tax-free?
No. The threshold only decides whether the payer must file a form. Firms' help pages say traders are responsible for reporting their own income. This is not tax advice.
When will 2026 1099s arrive?
Firms sent 2025 forms in late January to mid-February 2026; forms for 2026 payments are expected in early 2027.