IRS Delays $600 Form 1099-K Reporting Threshold for Third-Party Payment Platforms
The IRS announced on Dec. 23, 2022, that it would delay the $600 reporting threshold for Form 1099-K that was set to go into effect during the 2022 tax year. Instead, these requirements have been pushed back one year to allow taxpayers more time to prepare for the change.
Form 1099-K is an informational tax document detailing the gross payments for goods and services for all your third-party payment platform transactions. Before this announcement, third-party payment platforms (think eBay, Etsy, PayPal, or Venmo) were required to issue Form 1099-K to all users who had payments totaling $600 or more in a calendar year, with no transaction minimum.
Instead, this delay means that the previous reporting threshold of 200 separate transactions totaling at least $20,000 in a calendar year will remain in effect for the 2022 tax filing season.
Due to the timing of this announcement, it’s possible companies like eBay or Etsy could still choose to issue a 1099-K for 2022, but it would be up to each company’s discretion. If you had backup withholding withheld by a third-party payment platform, you should still expect to receive a Form 1099-K.
Remember, this delay only changes when companies are required to issue Form 1099-K. Even if you don’t receive a 1099-K for 2022, you still need to report any taxable income on your tax return.
And if you do receive Form 1099-K this tax year, don’t stress. TaxAct is here to help you accurately file the income reported on your Form 1099-K.
You can read the IRS’s official announcement on their website.