Overview
On November 21, 2023 the IRS announced in IR-2023-221 that Notice 2023-74 delays the new $600 Form 1099-K reporting threshold for calendar year 2023, and that it planned a $5,000 threshold for 2024 to phase in implementation.
What has changed?
The American Rescue Plan Act of 2021 set a $600 threshold with no transaction minimum.
Superseded: the One, Big, Beautiful Bill retroactively reinstated the earlier threshold of more than $20,000 and more than 200 transactions.
Who is affected?
Third party settlement organizations, and people who receive payments for goods or services through payment apps and online marketplaces.
When does it take effect?
Applied to calendar year 2023 (and the planned $5,000 threshold to calendar year 2024).
What this means for you
- Historical: this transition guidance is no longer the operative rule.
- Income from payment apps and marketplaces is taxable whether or not a Form 1099-K is sent.
Recommended next steps
- Read the current article on the $20,000 and 200-transaction threshold.
General educational guidance, not tax advice. Schedule a consultation to discuss your situation.
Important dates
- November 21, 2023Delay announced (IR-2023-221, Notice 2023-74)