Compliance

IRS Inflation Adjustments & Form 1099-K Update: What U.S. Taxpayers Should Know for 2026

Significant IRS changes made in late 2025 affect inflation-indexed tax thresholds and reporting obligations — especially around Form 1099-K thresholds under the One, Big, Beautiful Bill.

By NomadicTax Research Team • 5-8 min read • November 24, 2025

## Key IRS Changes Just Announced ### 1. Inflation Adjustments for 2026 The IRS released **Revenue Procedure 2025-32**, applying inflation adjustments to more than 60 tax provisions including income tax rate brackets, standard deductions, and other thresholds for tax year 2026.([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai)) ### 2. 1099-K Thresholds Revised Under OBBB Under the **One, Big, Beautiful Bill**, the lower threshold for third-party settlement organizations to issue **Form 1099-K** has been adjusted. The IRS issued FAQs confirming a return to a **$20,000** gross payments threshold (with >200 transactions) for certain periods.([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai)) ### 3. Guidance on Employee Retention Credit (ERC) Additional IRS guidance (Fact Sheet 2025-07) clarifies limitations and refund claims for ERC in Q3 and Q4 of 2021, especially for claims filed after deadline of January 31, 2024.([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai)) ## How Changes Affect U.S. Taxpayers - **Higher thresholds**: Because of inflation, thresholds for many credits and deductions will increase, reducing tax for many. - **Marketplace and gig platform users:** If your gross payments on platforms like eBay, Uber, or Airbnb exceed **$20,000** (and >200 transactions), third-party settlement entities will issue 1099-K forms. Below those thresholds, it's less likely — though income remains taxable regardless. - **Late ERC claims**: Strict deadlines still apply — late filings may be trimmed or denied under new limitations. ## Practical Planning Tips - **Estimate 2026 brackets now**: For high-earners, knowing bracket edges helps in timing income or deductions. - **Track platform sales carefully**: Keeping transaction count and payment totals will help determine whether you’ll receive 1099-K. - **Document ERC eligibility**: Given stricter guidance, keep thorough records for refunds/credits to support any claim. ## Example Scenarios - A gig worker earning $21,000 through many small sales: previously may not receive 1099-K if under 200 transactions; under new guidance threshold may apply. - A business with car‐loan interest reporting obligations: IRS has given transition relief for lenders under new OBBB rules.([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai)) ## Summary These newly effective adjustments can reduce your liability and change your reporting obligations: keep abreast of inflation changes, the 1099-K thresholds, and timing for ERC claims. Proactive planning helps avoid surprises during the next filing season.