What’s Changed with Form 1099-K Reporting
Under the new law—Public Law 119-21, aka the One, Big, Beautiful Bill (OBBBA)—the IRS has retroactively reinstated the Form 1099-K reporting thresholds that were in place before ARPA 2021. This means third-party settlement organizations are no longer required to report unless both:
- The gross amount to a payee exceeds $20,000, and
- The number of transactions exceeds 200 for the year. (irs.gov)
These thresholds apply retroactively—so even past returns may be affected if reporting under the now-defunct lower thresholds occurred under incorrect premises. (irs.gov)
Who Should Pay Attention
- Small business owners, gig economy workers or anybody using platforms such as PayPal, Stripe, or Venmo should check whether they're receiving 1099-K forms under the old ARPA-mandated ~$600 thresholds. Some of those forms may have been issued but are no longer legally required if they fail BOTH the new dollar and transaction counts. (irs.gov)
- Payment processors and settlement organizations must adjust reporting systems and only issue 1099-K forms when the payee meets the new dual thresholds. (irs.gov)
Practical Examples
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Example 1: Mike works as a dog walker, receives $15,000 over 180 transactions from clients via third-party apps. Under the new OBBBA reporting threshold, he won’t receive a 1099-K for 2025 from those apps since neither threshold is exceeded. However, he must still report all income on his tax return as required under regular income reporting rules.
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Example 2: Sharon hosts craft fairs and receives $25,000 over 150 transactions. She exceeds the dollar threshold only, but she does NOT meet both criteria. That means no 1099-K is required. She must still track and report this income—but the platform does not have to issue the form.
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Example 3: Tom delivers food and makes $30,000 via 250 deliveries through an app. That meets the dollar and transaction thresholds, so the platform will issue a 1099-K for his 2025 income.
Compliance Tips
- Maintain complete records even when you don't receive a 1099-K, including receipts, bank statements, payment app summaries. The IRS may query income sources during audits.
- Check thresholds carefully—both the dollar amount and the number of transactions must be exceeded.
- If you think a 1099-K should not have been issued under past lower thresholds, consider consulting a tax professional about whether amendments or clarifications are needed.
Bottom Line
The reinstated reporting thresholds reduce burden for small-volume, low-dollar users of third-party payment platforms. But income reporting obligations remain, so it's essential to properly track income even when no formal 1099-K arrives.