IRS Once Again Delays Effective Date for Lower Form 1099-K Threshold

Beginning in 2023, the Form 1099-K reporting threshold for businesses that use third-party apps, such as Venmo, Etsy, StubHub and Airbnb, was set to decrease significantly, from $20,000 to $600. In Notice 2023-74, the IRS has again delayed the effective date for the decreased reporting threshold for another year and announced that it will begin to phase-in the lowered threshold starting in 2024, starting at a $5,000 threshold for the 2024 tax year (2023 will simply be treated as another transition year). The American Rescue Plan Act (ARPA) of 2021 also removed the de minimis threshold which previously allowed an exception to filing Form 1099-K. In prior years, Form 1099-K was only required to be issued for third party networks transactions if the total number of transactions exceeded 200 for the year and the aggregate amount of these transactions exceeded $20,000. For 2023, the exception will continue to apply. For more information on these new rules, visit Tax Facts Online. : Q . Note: Q is updated.