What is the Form 1099-K threshold now?
Payment apps and online marketplaces (third party settlement organizations) only have to file Form 1099-K for a payee whose gross payments exceed $20,000 and whose transactions number more than 200. The One Big Beautiful Bill Act restored that pre-2021 rule retroactively, ending the planned drop to $600.
Sources checked . Current through .
The test
Under IRC §6050W(e), a third party settlement organization reports a payee's third party network transactions only if both are true for the year:
- the gross amount of payments to that payee exceeds $20,000, and
- the number of transactions exceeds 200
"Exceeds" means exactly $20,000, or exactly 200 transactions, does not trigger a form. The amount is gross, before fees and refunds.
What happened to $600
The American Rescue Plan Act of 2021 had lowered the threshold to $600 with no minimum number of transactions, and the IRS delayed it through a series of transition notices. The One Big Beautiful Bill Act restored the earlier $20,000 and 200 rule retroactively, so the $600 threshold never took full effect.
Income still counts
The threshold only decides whether a Form 1099-K is filed. A client who sells goods or services through an app still reports that income whether or not a form arrives.
Payment cards are different
The $20,000 and 200 exception applies to third party network transactions, such as payment apps and online marketplaces. It doesn't cover payment card transactions processed by a merchant acquirer.
Sources
- IR-2025-107: IRS issues FAQs on Form 1099-K threshold under the One, Big, Beautiful Bill (October 23, 2025)
- IRC §6050W(e): Exception for de minimis payments by third party settlement organizations
Not tax advice. Check the sources against your client's facts before relying on this.