The Republican tax-and-spending law reverts the threshold for online sales reporting to $20,000 and 200 transactions per year, as it was before 2021. The provision is applied retroactively to the 2022 tax year.

The IRS on Oct. 23 issued frequently asked questions in Fact Sheet 2025-08 regarding the dollar threshold for filing Form 1099-K under the One Big Beautiful Bill Act.

The Republican tax-and-spending law reverts the threshold for online sales reporting to $20,000 and 200 transactions per year, as it was before 2021. The provision is applied retroactively to the 2022 tax year.

“The One, Big, Beautiful Bill retroactively reinstated the reporting threshold in effect prior to the passage of the American Rescue Plan Act of 2021 (ARPA) so that a third party settlement organization (TPSO) is not required to file a Form 1099-K unless the gross amount of reportable payment transactions to a payee exceeds $20,000 and the number of transactions exceeds 200,” the fact sheet says.

Form 1099-K is used to report payments received for goods or services from payment apps (e.g., Apple Pay, PayPal, Venmo, or Zelle), online marketplaces, and payments from credit, debit, or payment cards.

The reporting threshold for Form 1099-K was $20,000 and 200 transactions from its inception in 2011 through 2023. However, the American Rescue Plan Act of 2021 eliminated the transactions requirement and reduced the threshold to $600.

This lower threshold for Form 1099-K was set to take effect for tax year 2023, but the IRS delayed its adoption. In November 2024, the IRS announced a plan to phase in the 1099-K reporting threshold change as follows:

More than $5,000 for 2024.
More than $2,500 for 2025.
More than $600 for calendar year 2026 and beyond.

But under Section 70432 of the OBBBA, the reporting threshold for Form 1099-K returns to $20,000 and 200 transactions. Per the legislation, this takes effect “as if included in section 9674 of the American Rescue Plan Act.”

The fact sheet posted by the IRS on Thursday provides background information on Form 1099-K and provides answers to more than 50 questions pertaining to the tax form and its reporting requirements.

The answers to the first two FAQ in the fact sheet were updated by the IRS today:

Q1. What is Form 1099-K and why would I receive one? (updated Oct. 23, 2025)
A1. Form 1099-K is an information return used to report payments you received during the year from:
Credit cards, debit cards or stored-value cards such as gift cards (payment cards)Payment apps or online marketplaces for goods or services (TPSOs)
You should receive a Form 1099-K if you sold a good or provided a service, you were paid through a payment app or online marketplace, and your gross payments and transactions are in excess of the reporting threshold, or you accepted a payment from a payment card for any amount. You may have a tax obligation if you had a gain on the sale of goods or received payment for services you provided.
Form 1099-K is an information return that payment apps and online marketplaces provide when you use them for selling goods or providing a service. You can use the information on the Form 1099-K with your other tax records to determine your correct tax owed. See Understanding Your Form 1099-K for more information.
Third party information reporting for certain payments is required by law and has been shown to increase voluntary tax compliance, improve tax collections and assessments within the IRS, and thereby reduce the tax gap.
Q2. Is there a threshold amount that must be met before I would receive a Form 1099-K? (updated Oct. 23, 2025)
A2. There is no threshold amount that must be met to receive a Form 1099-K due to payments received through a payment card transaction. Therefore, if you received $0.01 of payments from a payment card transaction, you should receive a Form 1099-K for those payments.
There is a threshold for payments received through a TPSO. TPSOs are required to report when total gross payments for goods or services exceed $20,000 and there are more than 200 transactions for a payee. Your state may have a lower reporting threshold for TPSOs, which could result in you receiving a Form 1099-K, even if the total gross payments and transactions did not exceed the federal reporting threshold.

A general overview of taxpayer reliance on guidance published in the Internal Revenue Bulletin and FAQs can be found here.