Compliance
Understanding the Reinstated 1099-K Threshold under the One, Big, Beautiful Bill
The One, Big, Beautiful Bill has restored the reporting thresholds for Form 1099-K to $20,000 and 200 transactions—retroactive changes that affect both payees and payment processors.
By NomadicTax Research Team • 5-8 min read • November 21, 2025
## 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](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))
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](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 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](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))
- **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](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))
## Practical Examples
- **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.
- **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.
- **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.