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) This means fewer people—especially those receiving many small payments—will need to file this form. (irs.gov)
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
- Track payment volume and counts accurately. Ensure your records from payment platforms distinguish amounts per payee and count the number of transactions.
- Review your past 12 months’ receipts. If you were previously over the ARPA threshold but now fall below, you may avoid new reporting requirements.
- Communicate with platforms. For payment settlement entities, confirm if you'll receive a 1099-K and plan for your bookkeeping accordingly.
- 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.