Compliance
Planning for the New Form 1099-K Thresholds under the One, Big, Beautiful Bill
Businesses and individuals need to adjust to the reinstated Form 1099-K reporting thresholds—know where you fall, how to track, and when you should plan to file.
By NomadicTax Research Team • 5-8 min read • November 13, 2025
## What changed under the One, Big, Beautiful Bill (OBBB)
In October 2025, the IRS published FAQs clarifying that **the dollar threshold for filing Form 1099-K** has reverted to **$20,000 and over, plus more than 200 transactions**, as it was prior to 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)) This means fewer people—especially those receiving many small payments—will need to file this form. ([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))
## Why this matters: who is affected
- Individuals such as gig economy workers, online sellers, or influencers whose income is received via third-party settlement organizations (e.g., payment apps).
- Small businesses that receive many low-value payments—if their **gross transactions total under $20,000 or don't exceed 200 payments**, they’d be exempt.
- Tax preparers and bookkeepers who must understand whether their clients need to file a 1099-K.
## Actionable steps to adapt
1. **Track payment volume and counts accurately.** Ensure your records from payment platforms distinguish amounts per payee and count the number of transactions.
2. **Review your past 12 months’ receipts.** If you were previously over the ARPA threshold but now fall below, you may avoid new reporting requirements.
3. **Communicate with platforms.** For payment settlement entities, confirm if you'll receive a 1099-K and plan for your bookkeeping accordingly.
4. **Update your tax software.** Many platforms and tools are built around reporting thresholds; make sure yours reflects the OBBB change.
## Example scenarios
- **Case A:** Jane runs an Etsy shop, receiving 150 payments that total $18,000 from sales. She **won’t receive a 1099-K**, so she must still report income, but the platform won’t provide the form automatically.
- **Case B:** Tom drives for a rideshare company. He gets 250 rides, each under $100, totaling $19,000. Even though his total is under $20,000, because he exceeded 200 transactions, **he will receive a 1099-K**.
- **Case C:** Lucy gives yoga lessons, receives $35,000 in total over 60 sessions. She **will receive a 1099-K**, even with fewer transactions, because gross payments exceeded $20,000.
## Tips to reduce surprises on your tax return
- Keep track of **all income**—1099-K forms are informational; whether you get one or not, you must report all income.
- Save income and expense records, including platform statements, for at least three years.
- If seasonal or periodic high volume occurs, project thresholds mid-year to prepare.
**Bottom line:** The rollback of the low threshold relieves many with high transaction count but low total amounts. Still, all income must be reported—Form 1099-K is about easing reporting burden, not reducing tax liability. Understanding where you fall under the new rules saves time and prevents surprises.