IRS Once Again Delays $600 1099-K Reporting Threshold Effective Date

The IRS has granted another extension with respect to the reduced 1099-K reporting threshold. 2024 and 2025 will now be treated as transition years. During 2024, third-party settlement organizations like Venmo, StubHub, Airbnb and PayPal will be required to report if the total payments received by a taxpayer is over $5,000. In 2025, the threshold amount will be reduced to $2,500 and, finally, will reach the $600 level for 2026 and beyond. The IRS noted that it will not penalize the organization for making payments to a participating payee in settlement of third party network transactions and failing to pay backup withholding tax required to be withheld during 2024. Prior to the American Rescue Plan Act (ARPA) of 2021, Form 1099-K was only required to be issued for third party networks transactions if the total number of transactions exceeded 200 for the year and the aggregate amount of these transactions exceeded $20,000. ARPA eliminated the de minimis exception based on a minimum number of transactions. 2022 and 2023 were also treated as transition years. For more information on the new Form 1099-K reporting requirements, visit Tax Facts Online. Read More: Link to Q8724.01. Note: Q is updated.