Reporting thresholds are higher now than at the beginning of 2025.

Businesses, contract workers and freelancers who use apps to accept payments need to know about the latest rules on income that gets reported to the IRS. Here’s what changed this year for 1099-K thresholds.

What’s a 1099-K?

A 1099-K is a form that reports payments you received for goods and services during a calendar year. Third-party merchant services and platforms—like Venmo, PayPal, Etsy, eBay, Airbnb and others that process credit and gift cards—are required to file a 1099-K for users who meet the IRS’s reporting threshold.

When third parties send a 1099-K to the IRS, they also send one to you. (Payments received from family and friends are not reported on a 1099-K.)

What’s the threshold for issuing a 1099-K?

The federal spending bill passed in July significantly changed the rules that were in place at the beginning of the year. Previously 1099-Ks were to report payments of $2,500 or more in 2025. The latest rules now mean 1099-K reporting for 2025 is only required if you:

• Receive more than $20,000 in gross payments, and
• Have more than 200 transactions on a single platform

When are 1099-K forms sent?

If you meet the thresholds above, the third-party service will issue a 1099-K form for 2025 by January 31, 2026.

What do I do with a 1099-K?

Information reported on a 1099-K is treated as income. However, when you file taxes you’ll deduct your costs of doing business. You’re required to report all income whether or not it’s reported on a 1099-K. Working with a knowledgeable tax preparer or accountant can help ensure you properly account for all income and write off eligible expenses.

What if you get a 1099-K you shouldn’t have?

Keep accurate records of payments received for good and services and verify that any 1099-K forms you receive are correct. If you find an error or receive a 1099-K when you shouldn’t have, the IRS advises taxpayers to contact the issuer and ask for a corrected Form 1099-K, even if the amount is $0. Also, keep a copy of the original form and all correspondence with the issuer for your records.

 

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