A Merry Christmas from the IRS: Companies Will not Send Form 1099-K to PayPal, Venmo or CashApp Sellers, Great News for eBay, Etsy, Poshmark, and ABNB
Had this gone into effect for 2023, tax paperwork would have been send out to tens of thousands with a threshold of just $600 but typically triggered by $20,000 AND over 200 transactions
Acting IRS Commissioner Doug O’Donnell said that IRS and Treasury officials heard concerns voiced by accountants and e-commerce business people who complained about putting a set of new, lower reporting requirements into practice. Effective tax year 2023, the tax year would be a “transition period” before the full implementation of Form 1099-K being sent to those making over $600 via PayPal, Venmo, and CashApp.
The American Rescue Plan Act of 2021 had dropped the threshold to just $600. And even one single transaction could have triggered a form.
For now, if you made over $20,000 AND had over 200 transactions, the companies can still issue you a Form 1099-K for calendar year 2022 taxation.
Last week, the American Institute of CPAs shared they had “deep concerns” about the $600 tax reporting threshold in this December 16, 2022 letter to the Senate Finance Committee and the House Ways and Means Committee.
Airbnb called this
“great news for millions of Americans.”
A spokesperson for the Coalition for 1099-K Fairness said,
“We appreciate the IRS providing this critical relief so that millions of people aren’t unnecessarily burdened with tax forms in 2023 for splitting meals, selling used goods, paying back a friend, or other instances where no taxable income was generated,”
and
“The delay creates a chance for lawmakers to find a common-sense and permanent solution.”
eBay commented,
“We appreciate the IRS stepping in and providing a one-year delay, and are encouraged that they recognized the threshold decrease would have caused confusion and uncertainty for Americans this tax season.”
Urging a higher reporting threshold, The American Institute of CPAs calling the delay,
“the right move for taxpayers, tax practitioners and for the IRS”
The IRS confirmed the intent of the law on Friday,
"The law is not intended to track personal transactions such as sharing the cost of a car ride or meal, birthday or holiday gifts, or paying a family member or another for a household bill.”
I hope this is good news for some of you!
God bless you this Christmas Eve. May His light shine blessings on the work of your hands and the steps of your feet.
May GD bless you and yours Dr Aranda. You have saved our lives and inspire us daily, Katz Family