Overview
IRS Fact Sheet 2025-08 explains that a third party settlement organization is not required to file Form 1099-K unless the gross amount of reportable payment transactions to a payee exceeds $20,000 and the number of transactions exceeds 200.
What has changed?
The American Rescue Plan Act of 2021 lowered the threshold; the IRS later planned phased-in thresholds ($5,000 for 2024).
The One, Big, Beautiful Bill retroactively reinstated the threshold that applied before the American Rescue Plan Act of 2021: more than $20,000 and more than 200 transactions.
Who is affected?
Third party settlement organizations (payment apps and online marketplaces) and people who receive payments for goods or services through them.
When does it take effect?
The IRS describes the change as retroactive and gives no separate effective date; NetFintax shows the July 4, 2025 enactment date of the law.
What this means for you
- You may receive fewer Forms 1099-K, but income is taxable whether or not you receive one.
- Payment card transactions have no threshold. A platform may also still send a form for lower amounts, and some states set lower thresholds.
Recommended next steps
- Keep your own records of all income from marketplaces and payment apps.
- Report all income on your return even if no 1099-K arrives.
General educational guidance, not tax advice. Schedule a consultation to discuss your situation.
Important dates
- July 4, 2025One, Big, Beautiful Bill enacted
- October 23, 2025IRS fact sheet and FAQs published