The IRS Delays New 1099-K Reporting Threshold Until 2024

The IRS recently announced that it is delaying implementation of the new, lower 1099-K reporting threshold until the 2024 tax year, treating 2023 as a “transitional year.”

The 1099-K form is used to report revenue received from third-party payment networks like Venmo or CashApp. Currently, third-party payers must issue a 1099-K if a taxpayer has over $20,000 in gross revenue or 200 transactions on the platform.

Last year, Congress passed a law directing the IRS to lower the 1099-K threshold to $600 of gross revenue starting in tax year 2022. However, citing difficulties with timely implementation, the IRS pushed the change to the 2023 tax year.

Now, the IRS has announced it will wait until the 2024 tax year to begin lowering the 1099-K threshold, taking an incremental approach. In 2024, the threshold will lower to $5,000 of gross revenue. In 2025, the threshold will reach the originally planned $600 gross revenue amount.

So for taxpayers earning income through third-party apps in 2023, the current 1099-K rules still apply. You will not receive this form unless you exceed $20,000 in revenue or 200 transactions.

But the lowered threshold is planned to effect starting in 2024, so know you may want to consider it as you plan for next year’s taxes.