What changed under the One, Big, Beautiful Bill (OBBB)
- Before OBBB, under American Rescue Plan Act of 2021 (ARPA), third-party settlement organizations (TPSOs) had to file Form 1099-K when gross payments exceeded $600, regardless of number of transactions. (irs.gov)
- OBBB retroactively reinstates the pre-ARPA threshold: only when gross payments to a payee exceed $20,000 and there are more than 200 transactions must TPSOs file Form 1099-K. (irs.gov)
Who’s affected?
Affected parties include:
- Sellers on online marketplaces (Etsy, eBay, etc.)
- Gig economy workers receiving payments via apps
- Small business owners and side hustlers
What you must do now
- Track both number of transactions and total amount received via TPSOs. If either metric stays below the reinstated threshold, no 1099-K from TPSO is required.
- Report all income anyway: even if no 1099-K is issued, any income from goods or services must be reported. Not doing so can lead to penalties. (irs.gov)
- Provide taxpayer ID when required: platforms may request your Social Security Number or EIN to avoid backup withholding. (taxpayeradvocate.irs.gov)
Examples: What this looks like in practice
| Scenario | Total payments | Number of transactions | Requires Form 1099-K? | Why |
|---|---|---|---|---|
| Side hustle, 50 sales of handmade crafts, total $15,000 | $15,000 | 50 | No | Amount or transactions threshold not met. |
| One sale via auction site, $25,000, no other sales | $25,000 | 1 | No | Transaction count doesn’t exceed 200. |
| Many small sales, 300 transactions, total $19,000 | $19,000 | 300 | No | Amount below $20,000. |
| Gig worker, 250 rides, $22,000 total | $22,000 | 250 | Yes | Both thresholds exceeded. |
Tips for staying compliant
- Use software or apps that categorize income and tally TPSO payments throughout the year.
- Reconcile fees, refunds, and shipping costs so your net taxable income is accurate (gross payments are reported on 1099-K without such deductions).
- Keep good documentation (receipts, agreements with platforms) so you can prove correct reporting.
Bottom line: OBBB restores higher thresholds for Form 1099-K filing. Many casual sellers will avoid receiving a 1099-K from a TPSO but still must report all income. Tracking your earnings and transactions matters now more than ever.