Compliance
Big Changes for Gig Workers: Restored 1099-K Threshold Under the One, Big, Beautiful Bill
The IRS has reverted the 1099-K reporting threshold back to $20,000/200 transactions under the One, Big, Beautiful Bill—here’s how this impacts gig workers, side hustles, and payment apps.
By NomadicTax Research Team • 5-8 min read • November 21, 2025
## What’s Changed with Form 1099-K Reporting
Under the **One, Big, Beautiful Bill (OBBB)** signed into law July 4, 2025 (Public Law 119-21), Congress reinstated the former **$20,000 and 200‐transaction threshold** for Form 1099-K reporting for third-party settlement organizations. This undoes the lower $600 threshold introduced by the American Rescue Plan Act of 2021.([irs.gov](https://www.irs.gov/newsroom/irs-issues-faqs-on-form-1099-k-threshold-under-the-one-big-beautiful-bill-dollar-limit-reverts-to-20000?utm_source=openai))
Thus:
- If you receive payments through platforms like Venmo, PayPal, Etsy, etc., you only need to receive a 1099-K if you have **over $20,000** in gross payments **and** more than **200 transactions** in a calendar year.([irs.gov](https://www.irs.gov/newsroom/irs-issues-faqs-on-form-1099-k-threshold-under-the-one-big-beautiful-bill-dollar-limit-reverts-to-20000?utm_source=openai))
- The $600 threshold and “no‐transaction count” rule under ARPA no longer apply to those third-party settlement payments.([irs.gov](https://www.irs.gov/newsroom/irs-issues-faqs-on-form-1099-k-threshold-under-the-one-big-beautiful-bill-dollar-limit-reverts-to-20000?utm_source=openai))
## Who Is Affected—and Who Is Not
| Its For | How You’re Impacted | Exceptions to Know |
|---|---|---|
| Gig workers, casual sellers (crafts, side jobs), small-scale online services professionals | You’ll likely **receive fewer 1099-K forms** unless volume justifies it. Reduced paperwork. | Payments via credit/debit cards or direct settlement by payment cards still get reported regardless of the amount.([irs.gov](https://www.irs.gov/newsroom/irs-issues-faqs-on-form-1099-k-threshold-under-the-one-big-beautiful-bill-dollar-limit-reverts-to-20000?utm_source=openai)) |
| Payment platforms and third-party settlement organizations | Less frequent filings of 1099-K forms to IRS and to payees unless threshold met. | Platforms still may choose to issue them for other tracking or customer service reasons. |
## Practical Steps to Stay Compliant
1. **Document all income**—don’t rely solely on receipts from 1099‐Ks. Even payments not reported on 1099-K are still taxable if for goods or services.
2. **Track transactions**—volume matters now. Keep detailed logs of each transaction, even small ones, to know whether you might cross the 200-transaction trigger.
3. **Review platform reports**—compare statements from platforms against your own records. Platforms sometimes report gross before fees or refunds.
4. **Update bookkeeping tools** to filter which transactions are reportable, and flag when thresholds are met.
5. **Consult a tax pro** if you run into gray areas—e.g., multi-platform sales, mixed personal vs. business sales, or handling fees/refunds.
## Why This Matters
- **Reduced burden** for small sellers: fewer forms to process when earnings or transaction counts are modest.
- **Clarity and consistency**: reinstates pre-2021 rules many were used to.
- **Still tax liabilities** remain—income must be reported even if no 1099-K is issued.
## Example Scenario
Lily sells handmade jewelry via an online marketplace. In 2025 she made 150 sales (transactions) totaling $18,000 in gross amounts. Under the reinstated threshold, Lily will *not* receive a 1099-K for those sales—though she’ll still need to report the income on Schedule C and claim business expenses. If Lily instead made 250 transactions totaling $25,000, she *would* receive a 1099-K.
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This change takes effect retroactively so that tax years beginning since ARPA’s changes are viewed under the OBBB standard. It’s a win for many small business owners and casual sellers—but double-check your platforms and recordkeeping to keep everything tidy.