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Real Estate Agencies: Year-End Payroll Checklist (2026)
Year-end payroll for real estate brokerages is W-2s and any 1099-NEC to employees and contractors by January 31, the fourth-quarter 941 and annual 940, and the real estate brokerage items that decide which boxes are right: IRS, Statutory nonemployees. BEG: $45 per employee per month inside the payroll software you already use, live in 3 to 5 days.
Real estate brokerage items that shape the W-2 and 1099s
Licensed real estate agents are statutory nonemployees treated as self-employed for all federal tax purposes, including income and employment taxes, if substantially all payments for their services are directly related to sales or other output rather than hours worked, and their services are performed under a written contract stating they will not be treated as employees for federal tax purposes.
For tax years beginning after 2025, the reporting threshold for nonemployee compensation on Form 1099-NEC is $2,000 per payee per year, and the amount may be adjusted for inflation beginning in calendar year 2027. Commissions paid to nonemployee agents are reported in box 1a.
Employers who file 10 or more information returns in a year, counting Forms 1099, 1042-S, and W-2 together, must file them electronically. The IRS Information Returns Intake System (IRIS) is a no-cost option for filing the Form 1099 series.
The January calendar
W-2s and W-3 to the SSA and copies to employees by January 31; 1099-NEC for each contractor paid $2,000 or more in the year, the threshold for tax years after 2025, by the same date; Form 940 and the fourth-quarter 941 by January 31 as well, with a 10-day extension where all deposits were on time. Ten or more information returns of any kind, counted together, must be filed electronically. For real estate brokerages the reconciliation that matters is that the pay codes for commission-only agent payroll, agent contractor vs W-2 classification and split commission processing landed in the right W-2 boxes for every employee.
The rules behind this page, with sources
General information, not legal advice. Every rule below was read on the agency page linked next to it.
- Licensed real estate agents are statutory nonemployees treated as self-employed for all federal tax purposes, including income and employment taxes, if substantially all payments for their services are directly related to sales or other output rather than hours worked, and their services are performed under a written contract stating they will not be treated as employees for federal tax purposes. [IRS, Statutory nonemployees]
- For tax years beginning after 2025, the reporting threshold for nonemployee compensation on Form 1099-NEC is $2,000 per payee per year, and the amount may be adjusted for inflation beginning in calendar year 2027. Commissions paid to nonemployee agents are reported in box 1a. [IRS Instructions for Forms 1099-MISC and 1099-NEC (12/2026)]
- Employers who file 10 or more information returns in a year, counting Forms 1099, 1042-S, and W-2 together, must file them electronically. The IRS Information Returns Intake System (IRIS) is a no-cost option for filing the Form 1099 series. [IRS, Reporting payments to independent contractors]
Read the full guide to how to handle year-end payroll and W-2s, and the rest of the real estate brokerage payroll library.
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Frequently Asked Questions
Year-end for real estate brokerages: IRS, Statutory nonemployees
Licensed real estate agents are statutory nonemployees treated as self-employed for all federal tax purposes, including income and employment taxes, if substantially all payments for their services are directly related to sales or other output rather than hours worked, and their services are performed under a written contract stating they will not be treated as employees for federal tax purposes.
Year-end for real estate brokerages: IRS Instructions for Forms 1099-MISC and 1099-NEC (12/2026)
For tax years beginning after 2025, the reporting threshold for nonemployee compensation on Form 1099-NEC is $2,000 per payee per year, and the amount may be adjusted for inflation beginning in calendar year 2027. Commissions paid to nonemployee agents are reported in box 1a.
When are W-2s and 1099s due for a real estate brokerage?
January 31 for both, to the recipient and to the SSA or IRS. The 1099-NEC threshold is $2,000 for tax years after 2025, and 10 or more information returns of any type must be e-filed.
What does managed payroll cost for a real estate brokerage?
$45 per employee per month, all-inclusive, inside the payroll software you already use, with no monthly minimum. Commission-only agent payroll, agent contractor vs W-2 classification and split commission processing are configured at setup, not billed as add-ons.
Related Resources
Anthony leads payroll solutions at Business Executive Group, a national managed payroll firm serving businesses across industries including Real Estate Agencies. BEG manages payroll at $45 PEPM, all-inclusive, with deep expertise in compliance, multi-state filing, and industry-specific payroll requirements. Get instant pricing at beghr.com.
Authoritative source: IRS: Understanding Employment Taxes
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