If you paid an independent contractor less than $600 total during the calendar year for services related to your business, you generally are not required to issue them a Form 1099-NEC. The $600 threshold is a reporting floor set by the IRS: once total payments to a single contractor during the year cross that line, you must send a 1099-NEC and file a copy with the IRS. Below that amount, there is no federal filing requirement for you as the payer.
This rule applies per contractor, per calendar year, not per project or per invoice. So if you hired three different freelancers and paid each of them $400, you don't need to issue any 1099s, because none of them individually crossed $600. But if you paid the same person $300 in March and another $350 in October, that's $650 total for the year to that one person, and now a 1099-NEC is required.
The threshold applies to payments for services, not goods. If you bought a product from someone, that purchase doesn't count toward the $600 threshold for 1099-NEC purposes. The rule also generally doesn't apply to payments made to corporations (C-corps or S-corps), with the main exception being payments to attorneys, which often must be reported regardless of entity type or amount. Payments to sole proprietors, single-member LLCs, and partnerships are the ones that typically trigger the requirement once they hit $600.
Even if you're not legally required to send a 1099 below $600, you can still choose to do so, and some businesses do it as a matter of consistent bookkeeping practice. There's no penalty for sending one you didn't have to send. What you cannot do is skip issuing one once the $600 threshold is crossed, even if the contractor asks you not to bother or says they'll report the income anyway. The requirement is on you as the payer, separate from whether they report the income on their own return.
Keep in mind that the $600 threshold is about your reporting obligation, not the contractor's tax obligation. Independent contractors are required to report all income they earn, even a single $50 payment, on their own tax return. The 1099 just creates a paper trail that helps the IRS match income; its absence doesn't make the income tax-free for the person who earned it.
Practically speaking, it's wise to track every contractor payment throughout the year rather than waiting until January to add things up. Collecting a Form W-9 from any contractor before you pay them, regardless of the expected amount, saves you from scrambling for their taxpayer ID number later if total payments end up crossing $600. If you're unsure whether a particular arrangement counts as a reportable service payment, a bookkeeper or tax professional can confirm your filing obligations before deadlines hit.