New Threshold for IRS Form 1099-K

IRS Form 1099-K is used by third-party payment organizations to report the transactions they process for retailers or other third parties.

Under the prior law, a 1099-K was issued only in the event that a business charged customers at least 200 times in a year, and $20,000 in the aggregate. The American Rescue Plan Act of 2021 eliminated the 200 transaction threshold entirely and lowered the dollar amount to just $600.

Many more payees than before will likely be receiving Form 1099-K, which must be sent by January 31 following the end of the reporting year.