General information only. Not tax, legal or investment advice. A planning idea named here is not a recommendation for any person. Prem Tax and Accounting Corp is a CPA firm, not a law firm. Tax rules change often and figures are for the tax year shown: confirm with the official source or a qualified adviser before you act. Read the full notice. Book a 10-minute call.

Current Topics

Qualified small business stock, C corporations and the new 1099 thresholds

Founders, shareholders and anyone who hires contractors will find new numbers here: stock held three, four or five years, a corporate giving floor, and a $2,000 reporting line for 2026 payments.

Prepared by Prem Tax and Accounting Corp. Last reviewed November 6, 2026. Figures as of November 6, 2026.

Three separate rules sit on this page: qualified small business stock (QSBS), the C corporation basics, and the information forms a business sends out. We check them with the Dated-Paper Drawer Check below.

The short version

Settled law: QSBS acquired after July 4, 2025 can exclude 50, 75 or 100 percent of gain when held 3, 4 or 5 years.
The 21 percent corporate rate had no end date before the 2025 law and has none now.
Forms 1099-NEC and 1099-MISC start at $2,000 for most 2026 payments ($2,100 for 2027).

QSBS at a glance

Rule	Newer stock	Older stock	Date that decides
Exclusion	50, 75 or 100 percent at 3, 4 or 5 years	Held more than 5 years	Acquired
Cap per company	$15 million	$10 million	Acquired
Company assets	Up to $75 million	Up to $50 million	Issued

Newer means acquired after July 4, 2025. The cap can also be 10 times your basis, if greater; for 2027 the IRS published $15,480,000 and $77,390,000. The company must be a domestic C corporation using at least 80 percent of its assets in a qualified business, so health, law, financial services and hotels are out. Illinois adds back the excluded gain for years ending on or after December 31, 2026. IRS regulations are still pending.

An invented example

Jordan bought newly issued shares of a qualifying company in September 2025 and sells in November 2029 for a $2,000,000 gain. Four years and two months is the 75 percent tier: $1,500,000 is excluded and $500,000 is taxed under other rules. Shares bought in June 2023 and sold after three years would get no exclusion; the old rule needs more than five years.

Corporations and 1099 forms

A C corporation pays 21 percent. For tax years beginning after 2025, its gifts count only above 1 percent and up to 10 percent of taxable income.

Form	Threshold	Status
1099-NEC and 1099-MISC, 2025 payments	$600	Settled law
Same forms, 2026 payments	$2,000	Settled law; regulation proposed
Same forms, 2027 payments	$2,100	IRS-published
1099-K from payment apps	Over $20,000 and over 200 transactions	Settled law

Attorney gross proceeds stay at $600, and card payments are reportable at any amount. For 2026, Forms W-2 are due to the Social Security Administration February 1, 2027, with new box 12 codes TP and TT for tips and overtime.

The Dated-Paper Drawer Check

People in this situation often consider these steps; ask your adviser.

Keep stock papers showing when the shares were issued and when you acquired them.
Ask the company for a written note on its assets and business type at issue.
Total each contractor's 2026 payments against $2,000 before year end.
Confirm your payroll software supports W-2 codes TP and TT.
Plan for the Illinois add-back when a QSBS sale falls in 2026 or later.

See the pass-through group, the equipment and research guide, startup tax planning and the tax calendar.

Common questions

Does the new QSBS schedule cover stock I bought in 2023?

No. The 3, 4 and 5 year tiers apply to stock acquired after July 4, 2025. Older stock keeps the more-than-five-years rule.

Is the $2,000 line in effect for 2025 payments?

No. The $600 line applies through 2025, and $2,000 starts with 2026 payments.

If I get no 1099-K, is the income still taxable?

Yes. Reporting rules do not decide what is taxable.

Official sources

Keep reading

Please read: general information only

This page gives general information and education about current federal and state tax topics, including recent legislation, planning ideas, retirement and annuity rules, and court decisions. It is not tax, legal, accounting, investment, insurance or other professional advice, and it is not a substitute for advice from a qualified CPA, attorney or other adviser who knows your facts. Reading it does not create a CPA-client or any other professional relationship with Prem Tax and Accounting Corp. Prem Tax and Accounting Corp is a CPA firm, not a law firm. It does not sell insurance or investment products, and it does not recommend, rate or sell any annuity, fund or other product. A planning idea, a strategy name or an example here is not a recommendation to take or avoid any action.

Tax rules, thresholds, rates and deadlines change often, and Congress, the IRS, the courts and the states change how they apply them. Guidance on recent legislation is still being issued. We checked the figures against the official sources named on the page on the date shown (last reviewed November 6, 2026), but we do not promise that this page is complete, current or free of errors, and we do not update it the moment a rule changes. Where the rules are unsettled or guidance is still pending we say so. Amounts for a future year are labelled planning figures until the IRS or another agency publishes them. Examples use invented numbers and are for illustration only.

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Questions about how the new tax law or your year-end moves apply to you? Keshav Agrawal is a U.S. CPA and a Chartered Accountant (CA) from India. We prepare U.S. and Illinois returns, plan with you, and work alongside your financial adviser, insurance agent or attorney. We sell no investment or insurance products. Book a 10-minute call or send us a message.

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