IRS Delays $600 Reporting Threshold for Form 1099-K
The Internal Revenue Service (IRS) announced a delay in implementing the lowered reporting threshold for third-party settlement organizations (TPSOs), such as Venmo, PayPal, and other payment platforms.
Key Update:
- The new $600 reporting threshold enacted by the American Rescue Plan of 2021 will NOT apply to tax year 2022 transactions.
- Instead, the existing threshold of $20,000 in payments and 200 transactions will remain in effect.
- Some lower-threshold 1099-K forms may still be issued as TPSOs adjust their reporting systems.
What This Means for Taxpayers:
- Delaying the $600 threshold does NOT change the taxability of income—earned income is still taxable.
- The IRS has released guidance on transitioning to lower reporting thresholds over time.
- Taxpayers should track their earnings independently and report taxable income even if they do not receive a Form 1099-K.
For official IRS guidance, visit www.irs.gov.