Payment apps and online marketplaces must file Form 1099-K only when a person's gross payments exceed $20,000 and the number of transactions exceeds 200 in a year. A 2025 law restored these limits retroactively, so the $600 rule never took effect. Card processors have no minimum, and your income is taxable whether or not a form arrives.
How the threshold changed
| Year | What happened |
|---|---|
| 2021 | The American Rescue Plan Act set a $600 threshold starting with 2022 |
| 2022 | The IRS delayed the $600 rule and kept $20,000 and 200 |
| 2023 | Delayed again, with $20,000 and 200 kept |
| 2024 | The IRS planned a $5,000 transition level |
| 2025 | The IRS planned a $2,500 transition level, with $600 to follow in 2026 |
The 2025 law (Public Law 119-21, the One Big Beautiful Bill Act) reversed the plan and restored $20,000 and 200 retroactively.
Other forms you may see
- Form 1099-NEC or 1099-MISC from a business that paid you. For payments after December 31, 2025, the reporting threshold is $2,000, up from $600, and it is adjusted for inflation in later years. See Forms 1099-NEC and 1099-K.
- Form 1099-DA from a crypto broker. See cryptocurrency taxes.
- Illinois: payers must file with the state when an Illinois-address payee has four or more transactions totaling over $1,000. Your federal duty does not change.
How to report the income
- Business or side-business sales go on Schedule C. See Schedule C and self-employment tax.
- Personal items sold at a gain go on Form 8949 and Schedule D. See capital gains and losses.
- Personal items sold at a loss are not deductible. Enter the combined 1099-K amount in the entry space at the top of Schedule 1 to account for the form.
- Gifts and reimbursements from friends, such as splitting a bill, are not income.
- The form shows the gross amount, which may include fees, refunds or personal payments, so your taxable income can be different.
Example (invented numbers, tax year 2025)
| Payments in 2025 | Transactions | Must the app file a 1099-K? |
|---|---|---|
| $26,000 | 310 | Yes, both tests are met |
| $26,000 | 150 | Not required, 200 is not exceeded |
| $18,000 | 400 | Not required, $20,000 is not exceeded |
All three people still report their taxable income. A seller who sold a used couch for $300 that cost $800 has a $500 personal loss, which cannot be deducted.
Common mistakes
- Quoting $600, $2,500 or $5,000 as the current threshold.
- Assuming no form means no tax.
- Deducting a loss on personal items.
- Counting friends' reimbursements as income.
- Mixing personal and business payments in one app account.
What gig workers and online sellers should do
- Track every payment all year, and keep personal and business money separate.
- Keep records of fees, refunds, shipping and what the items cost you.
- Report profit on Schedule C and plan for self-employment tax and estimated taxes.
- If a form is wrong or is not yours, ask the payer for a corrected form and keep a record of the request.
This is general information. A CPA can help reconcile a Form 1099-K to your books. See the guides for gig and rideshare drivers and online sellers, or browse Tax questions answered.
Frequently asked questions
Is the 1099-K threshold $600 in 2026?
No. As of October 2026 the rule for payment apps and marketplaces is more than $20,000 and more than 200 transactions. The $600 figure was a plan the 2025 law reversed.
Do I have to report income from Venmo or PayPal under $20,000?
Yes, if it is taxable income, such as payment for goods or services. Gifts and reimbursements are not income. The threshold only decides whether the app files a form.
When do I get a Form 1099-K?
By January 31. For 2026 payments, January 31, 2027 is a Sunday, so expect it by February 1, 2027.
What if my 1099-K is wrong?
Ask the payer for a corrected form, report your actual taxable income, and keep records of the steps you took.
Official sources
- IRS: IRS issues FAQs on Form 1099-K threshold under the One Big Beautiful Bill
- IRS: Form 1099-K FAQs, general information
- IRS: Form 1099-K FAQs, common situations
- IRS: Notice 2024-85
- Public Law 119-21 (One Big Beautiful Bill Act)
- Illinois Department of Revenue: Publication 110
This page is a plain-language summary. The official source controls if there is any difference.
General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.