TXCPA has kept members informed of the Form 1099-K threshold change from the American Rescue Plan Act of 2021. The $600 reporting threshold for third-party payment services was postponed late last year and again last week. Thank you, IRS.
In Notice 2023-74, the IRS pushed back the $600 reporting mandate. As a result, reporting by third-party payment services on a Form 1099-K is not required unless the taxpayer receives over $20,000 with more than 200 transactions in 2023.
The tax professional community is relieved. However, most taxpayers are unaware of the 1099-K storm that was averted.
Although the relief was granted around the Thanksgiving holiday, this decision was self-serving. The IRS just is not ready to receive 44 million 1099-Ks in the coming months.
The agency will treat 2023 as an additional transition year with a phase-in threshold increase to $5,000 for tax year 2024 while inviting feedback.