Tax pros, third-party settlement organizations, e-commerce platforms (including eBay, PayPal, Etsy, CashApp, and Venmo), and individuals and small businesses that use those platforms to sell their products and services celebrated this tax season 2023. The Internal Revenue Service (IRS) announced a delay in the new 1099-K reporting threshold enacted by Congress as part of the American Rescue Plan of 2021 (ARPA). 

As part of the act, the 1099-K reporting threshold was reduced from $20,000 to $600 for the tax year 2022. This change was originally scheduled to take effect in 2022 and would have affected platforms, businesses, and individuals this coming tax season 2023. 

As a result of this delay, the platforms and companies referenced above 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 by Congress as part of the ARPA.

The IRS guidance indicates that calendar year 2022 will be a transition period for implementing the lowered threshold reporting for third-party settlement organizations (TPSOs), including Venmo, PayPal, and CashApp, that would have generated Form 1099-Ks for taxpayers.

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