The IRS postponed the implementation of the $600 threshold for a second time. This means that for payments received in 2023, third-party payment platforms like PayPal, Venmo, and Etsy won’t be required to report payments exceeding $600 on Form 1099-K.
The old thresholds remain in place for 2023:
- $20,000 and 200 transactions: Payment platforms must report if your gross payments exceed $20,000 and you have more than 200 transactions in the year.
- No matter the amount: You’re still responsible for reporting all income you receive for selling goods or services, regardless of the amount or whether you receive a 1099-K.
The new plan for 2024: The IRS is proposing a $5,000 threshold for 2024, meaning platforms would only report payments exceeding $5,000. This is a transition step between the previous $20,000 threshold and the originally proposed $600 threshold.
Here are some resources for more information:
- IRS Announcement: https://www.irs.gov/newsroom/irs-announces-2023-form-1099-k-reporting-threshold-delay-for-third-party-platform-payments-plans-for-a-5000-threshold-in-2024-to-phase-in-implementation
- Understanding your Form 1099-K: https://www.irs.gov/newsroom/form-1099-k-frequently-asked-questions-general
- NTA Blog: Heard Loud and Clear: https://www.irs.gov/newsroom/irs-announces-2023-form-1099-k-reporting-threshold-delay-for-third-party-platform-payments-plans-for-a-5000-threshold-in-2024-to-phase-in-implementation
I hope this helps! Let me know if you have any other questions about the $600 1099-K update or your taxes in general.
