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IRS Delays New $600 Reporting Threshold for PayPal, Venmo

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IRS Delays New $600 Reporting Threshold

IRS Delays New $600 Reporting Threshold for PayPal, Venmo

The Internal Revenue Service has announced a delay in reporting thresholds for apps like Venmo, PayPal and others, which was set to take effect for the upcoming tax filing season.

As a result of this delay, these payments services will not be required to report tax year 2022 transactions on a Form 1099-K to the IRS or the payee for the lower, $600 threshold amount enacted as part of the American Rescue Plan of 2021.

The IRS said that calendar year 2022 will be a transition period for implementation of the lowered threshold reporting, which could likely affect millions or filers.

The American Rescue Plan of 2021 lowered the reporting threshold for business transactions to $600 per year. That’s down more than 200 transactions per year and an aggregate amount of $20,000. The law is not intended to track personal transactions such as sharing the cost of a car ride or meal, birthday or holiday gifts, or paying a family member or another for a household bill. However, it could prove difficult for companies to differentiate between these transactions when issuing Form 1099-K.

The IRS also noted that the existing 1099-K reporting threshold of $20,000 in payments from over 200 transactions will remain in effect.

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Based in NYC. Points/miles enthusiast for years and actively writing about it for the last 6+ years at Danny the Deal Guru. I'm always looking out for deals. Making a few bucks is always nice, but the traveling is by far the best part of this business.

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