Compliance
How The OBBB Is Changing Form 1099-K Thresholds: What Sellers Need to Know
The One, Big, Beautiful Bill has shifted the reporting requirements for Form 1099-K back to more familiar thresholds—and sellers using online platforms need to adapt now.
By NomadicTax Research Team • 5-8 min read • November 16, 2025
## 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](https://www.irs.gov/businesses/understanding-your-1099-k?utm_source=openai))
- 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](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’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](https://www.irs.gov/businesses/understanding-your-1099-k?utm_source=openai))
- **Provide taxpayer ID** when required: platforms may request your Social Security Number or EIN to avoid backup withholding. ([taxpayeradvocate.irs.gov](https://www.taxpayeradvocate.irs.gov/news/nta-blog/is-this-the-year-you-finally-get-a-form-1099-k/2025/02/?utm_source=openai))
## 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.