The November 1, 2026 DevEx royalty change, explained

The threshold is the story, not the form name

Most coverage of this change stops at "1099-NEC becomes 1099-MISC". That undersells it considerably.

For tax year 2026, the general 1099-NEC and 1099-MISC reporting threshold rose from $600 to $2,000. A creator who cashed out $1,200 in early 2026 would not have received a form at all.

Royalties are the exception. Royalty payments are reported in Box 2 of the 1099-MISC at $10 or more, and that threshold was not raised. So from November 1, essentially any creator who cashes out will generate a tax form.

To be clear about what this does and does not change: the $400 net self-employment floor at which you may be required to file has always been independent of whether a platform sent you anything. What changes is that far more people will now receive a document that says so in writing — and the IRS receives a copy.

Two thresholds people confuse

• $10 from November 1 — Roblox's obligation to report a royalty payment to you and the IRS.
• $400 — the net self-employment earnings level at which a U.S. filer may be required to file, whether or not any form arrived.

They were always separate. The change just removes the gap where a small creator got neither a form nor a reminder.

What it means if you're a U.S. creator

You may receive two forms for tax year 2026: a 1099-NEC covering payments before November 1, and a 1099-MISC covering royalty payments from November 1. Both are yours; neither replaces the other.

The harder question is how you report it. A payment reported in Box 2 as a royalty does not automatically mean royalty treatment on your return. There are two mainstream positions:

• Schedule C. If creating on Roblox is a trade or business you actively run, the income belongs on Schedule C with self-employment tax, and business expenses are deductible against it. Many practitioners take this view for active creators regardless of which box the platform used.
• Royalty treatment. Passive royalty income can be reported on Schedule E without self-employment tax. This is more defensible for someone who published something years ago and no longer works on it.

The difference is material — self-employment tax is 15.3% — and it depends on facts specific to you. We are not going to tell you which applies. If your DevEx income is more than pocket money, this is the year to ask someone qualified.

What it means if you're outside the U.S.

Non-U.S. creators receive Form 1042-S. Roblox issues it regardless of amount, so there is no threshold to fall under.

With valid tax information filed by October 31, 2026, 0% to 30% U.S. withholding applies to the portion of your earnings sourced from U.S. players — not your whole payout. Your exact rate depends on your country of residence and whether you successfully claim a treaty benefit.

This is where the royalty reclassification matters most for you: treaty rates for royalties are often different from the rates for services income. Claiming the benefit requires a valid W-8 with a taxpayer identification number and an explicit treaty claim — leaving the TIN blank silently forfeits it. Check your country's treaty in the IRS treaty tables before you file.

Without valid information by the deadline, 24% backup withholding can apply to your full payout rather than the U.S.-source share.

The detail almost everyone gets wrong

Roblox states plainly that withholding is determined by the payout date, not the submission date. A DevEx request you submit on October 28 that processes on November 3 is treated as a royalty.

This is why Roblox's own recommended deadline for requesting a payout under the old rules is October 15, 2026, more than two weeks before the Terms of Use change. If you were planning to squeeze a final cashout in at the end of October, that plan does not work.

One more thing worth knowing: withholding is not a fee. It is income tax paid in advance on your behalf and remitted to the IRS. It affects your cash flow, and it may come back to you when you file.