Key Points
- The new 1099-K rule for organizations such as Venmo or Paypal has been delayed.
- You still must report income earned from work over $600.
Stop worrying about it for this year. The 1099 for all payments over $600 rule is on hold. The IRS has delayed the new rule about third-party settlement organizations such as Venmo, or Paypal being required to send 1099-K for over $600. Before, the federal Form 1099-K reporting threshold was for more than 200 transactions worth an aggregate above $20,000. But the American Rescue Plan Act of 2021 slashed the threshold to just $600.
Because of confusion about the rule and personal payments being exempt, you don’t need to wait for the 1099-K before submitting your tax return this year under the new guidelines. This new rule must be managed carefully so that they are only issued to taxpayers who should actually receive them.
The IRS warns this doesn’t change tax requirements. Personal payment are exempt. But you still must report income earned from work over $600.
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Here is the IRS Announcement about the delayed rule from the IRS. Here is the IRS FAQ Factsheet.
