1099-K , Tax Alerts
New Payment Servicing Entities 1099-K Reporting Delayed for One Year
The 2021 American Rescue Plan Act (ARPA) included a law that requires payment servicing entities (PSEs) like Venmo, PayPal, eBay, and Etsy to file Form 1099-K to taxpayers and the IRS for anyone receiving over $600 in proceeds through the PSEs beginning with 2022 tax reporting. The law was enacted to help pay for ARPA by helping to close the tax gap. Prior to this law, the threshold was $20,000 in revenue and more than 200 transactions in a single calendar year.
Why Did the IRS Delay This Change for 1099-K Reporting?
To avoid expected confusion regarding the new law in the current tax-filing season among taxpayers who do small amounts of online selling, the Internal Revenue Service (IRS) has decided to delay the reporting requirement for one year. This delay will allow time for taxpayers to get educated about the new law and hopefully avoid millions of IRS “matching notices” being sent to taxpayers who are not aware of the new law and its reporting requirements.
Additionally, Congress will have time to consider changing the reporting level to a higher threshold than $600, which will ease reporting paperwork without having a large impact on the law’s goal of closing the tax gap.
For questions regarding this change or your business, please contact The Whitlock Co.
View Similar Blogs
Other blogs about cybersecurity and your business
How to Minimize Tax Liability: Practical Strategies for Individuals and Businesses
When it comes to financial planning, one of the most effective ways to protect your income and assets is by understanding how to minimize your tax liability. Whether you’re a business owner or an...
Congress Passes Landmark Tax Legislation: What the New Bill Means for You
On July 3, 2025, Congress passed the most sweeping tax legislation since 2017. Known unofficially as the One Big Beautiful Bill Act, this new reconciliation bill permanently extends key elements of...
Our Cost Accounting Services and How They Lead to Actionable Profit Strategies
Do you understand how costs affect your business strategy? The Whitlock Co. leverages our cost accounting expertise to help you analyze expenses. We give you the data you need to make...