IRS Delays Implementation of $600 reporting threshold for Forms 1099-K

On December 23, 2022, the IRS announced it would delay applying the lowered reporting thresholds for third-party settlement organizations (TPSOs) that were set to take effect for the upcoming tax filing season.

As a result, third-party settlement organizations like Venmo and PayPal will not be required to report tax year 2022 transactions on a Form 1099-K to the IRS or the payee for the lower $600 threshold amount that was enacted as part of the American Rescue Plan of 2021.

The existing Form 1099-K reporting threshold of $20,000 in payments from over 200 transactions remains in effect for tax year 2022. Some lower threshold 1099-Ks might still be issued due to service providers working to change their systems. But, reporting thresholds do not affect the taxability of income.

Have questions about what to do with a 1099 you received? Or whether your business should be sending 1099’s to your vendors or others? Schreiber Accounting and Advisory can help with comprehensive tax preparation and planning services. Contact the firm for more information.

Material discussed is for informational purposes only. It is not to be interpreted as investment, tax, or legal advice. Individual situations vary, and this information should only be relied upon when coordinated with individual professional advice.