1099-K Reporting Requirement and Updates

IRS Postpones New $600 Reporting Rule for 1099-K

The IRS announced a delay in implementing the new $600 Form 1099-K reporting threshold for third-party settlement organizations for the year 2023. This delay is aimed at reducing confusion among taxpayers and payment processors. In 2023, reporting will only be required if a taxpayer receives over $20,000 and has more than 200 transactions.

For the tax year 2024, the IRS plans to set a threshold of $5,000 as part of a phased approach to implement the $600 reporting threshold under the American Rescue Plan. This delay and phased approach allow for feedback and updates to Form 1040 to simplify the reporting process for taxpayers.

The new reporting requirements under the American Rescue Plan apply to third-party settlement organizations (TPSOs) for payments over $600 for the sale of goods and services. Personal transactions like gifts or sharing expenses are not taxable and should not be reported.

For assistance navigating these updates or any other tax matters, please feel free to contact us.