The Internal Revenue Service issued frequently asked questions in Fact Sheet 2025-08 regarding the dollar threshold for filing Form 1099-K under the One, Big, Beautiful Bill.
The OBBB retroactively reinstated the reporting threshold in effect prior to the passage of the American Rescue Plan Act of 2021 (ARPA) so that third party settlement organizations are not required to file Forms 1099-K unless the gross amount of reportable payment transactions to a payee exceeds $20,000 and the number of transactions exceeds 200.
Some of the added provisions are as follows:
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.
Q3. What qualifies as a payment card? (updated Feb. 06, 2024)
A3. The term “payment card” includes credit cards, debit cards, and stored-value cards (including gift cards), as well as payment through any distinctive marks of a payment card (such as a credit card number). A payment card is issued according to an agreement that provides all of the following: one or more issuers of the cards; a network of persons unrelated to each other, and to the issuer, who agree to accept the cards as payment; and standards and mechanisms for settling the transactions between the merchant acquiring entities and the persons who agree to accept the cards as payment.
Q4. What is a third party settlement organization (TPSO)? (updated Feb. 06, 2024)
A4. A TPSO is the central organization that has the contractual obligation to make payments to participating payees (generally, a merchant or business) of third party network transactions. An example could include apps used to handle the money transfer between buyers and sellers.
Q5. Does OBBB’s change in TPSO reporting threshold mean I won’t get a Form 1099-K if I receive gross payments totaling $20,000 or less, or have 200 or fewer transactions? (updated Oct. 23, 2025)
A5. Not necessarily. The federal reporting threshold of over $20,000 in payments and more than 200 transactions is a reporting requirement for TPSOs, but a TPSO may still send a Form 1099-K for payments for goods or services for amounts lower than the thresholds. In addition, you may receive a Form 1099-K from other payment settlement entities, such as merchant acquiring entities, because they do not have a de minimis reporting threshold. In addition, if a TPSO performed backup withholding under IRC 3406(a), Requirement to deduct and withhold, for a payee during the prior year they must file a Form 945, Annual Return of Withheld Federal Income Tax, and a Form 1099-K with the IRS and furnish a copy to the payee. Also, 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.
Q4. What should I do if my Form 1099-K is incorrect? (updated Feb. 06, 2024)
A4. If you believe the information on your Form 1099-K is incorrect, was issued in error, or you have a question relating to the form, contact the filer, whose name and contact information appears in the upper left corner on the form. If necessary, request a corrected Form 1099-K from the filer.
You may also contact the PSE whose name and phone number are shown on the lower left corner of the form.
Keep a copy of the corrected Form 1099-K with your records, along with any correspondence you have with the filer or the PSE.
The IRS can't correct your Form 1099-K.
If you can't get a corrected Form 1099-K, don’t wait to file your return. You can zero out the error when you file your return. Report the amount on Schedule 1 (Form 1040), Additional Income and Adjustments to Income.
Example: You receive a Form 1099-K for $11,000 your roommate sent you for their share of rent for the year. Because the $11,000 is a reimbursement for your roommate’s share of rent, that amount is not taxable income to you because it is not income; enter $11,000 in the entry space at the top of Schedule 1 (Form 1040).
Q9. Why did the ticket sale app or online marketplace ask for my social security number? (added Oct. 23, 2025)
A9. When payments to a payee exceed $20,000 and more than 200 transactions, many third party ticket sales apps or online marketplaces are required to report the gross sales to the IRS and send the payment information to the payee on a Form 1099-K. Your social security number needs to be reported on the Form 1099-K. Failure to provide your social security number to the ticket sale app or online marketplace may result in backup withholding. Backup withholding is tax that is deducted by a payor when the payee (usually the taxpayer): • Has a missing or incorrect Taxpayer Identification Number (individual taxpayer identification number (ITIN) or Social Security Number (SSN). • Fails to show that they’re exempt from backup withholding, or • The taxpayer’s name on file doesn’t match IRS or Social Security Administration records. If the amount withheld was inaccurate, the payor has the option to refund the amount to the taxpayer before issuing the Form 1099-K or reduce future withholding if it is within the same calendar year. If the Form 1099-K has been issued, a taxpayer may potentially receive a refund or credit when they file their tax return. If a taxpayer was subject to backup withholding, they should report the federal income tax withheld (shown on Form 1099-K, Box 4) when they file their tax return along with other tax information to ensure that they only pay what they owe. For more information, see Backup Withholding.
Q6. If I receive multiple Forms 1099-K that report proceeds from the sale of personal items sold at a loss or erroneous Forms 1099-K, do I need to identify the filer and the amounts separately for each or may I combine them all into one item on the Schedule 1, Additional Income and Adjustments to Income, for entry on Lines 8z, Other Income, and 24z, Other Adjustments? (updated Oct. 23, 2025) A6. Report the combined Form 1099-K amounts in the entry space at the top of Schedule 1 (Form 1040).
Q7. I received an erroneous Form 1099-K and could not get a corrected form in time to file my return. The tax software I used put the gross proceeds amount as a positive and the offsetting amount as a negative on Schedule 1, line 8z. This is different from instructions that say to input the offsetting amount on Schedule 1, line 24z. Is the alternative reporting okay? (updated Oct. 23, 2025)
A7. Yes. For calendar years 2022 and 2023 you may use Schedule 1, line 8z to show both the gross proceeds and the offsetting negative amount to report a Form 1099-K received in error or to report proceeds from the sale of a personal item at a loss as an alternative to reporting only gross proceeds on Schedule 1, line 8z with offsetting amounts on Schedule 1, line 24z. For tax years beginning in 2024, report the combined Form 1099-K amounts in the entry space at top of Schedule 1 (Form 1040).
Q11. If transactions would also be reportable on Form 1099-MISC or Form 1099-NEC under IRC 6041 or IRC 6041A, must they be reported twice? (updated Oct. 23, 2025)
A11. No, these transactions should not be reported twice. If a transaction is reportable under both IRC 6041, Information at source, or IRC 6041A(a), Returns regarding payments of remuneration for services, and under IRC 6050W, Returns relating to payments made In settlement of payment card And third party network transactions, the transaction should only be reported on Form 1099-K. The transaction should not be reported on Form 1099-MISC, Miscellaneous Information or Form 1099-NEC, Nonemployee Compensation. See the Instructions for Form 1099-K and the separate Instructions for the Forms 1099-MISC and 1099-NEC.
Q12: Is a payor allowed to issue an information return (e.g., Form 1099-K or Form 1099-NEC/Form 1099-MISC) if the amount the payor is reporting is below the information return's threshold to assist the recipient in claiming a deduction for qualified tips? (added Oct. 23, 2025)
A12: Yes, a payor is allowed to issue an information return to the recipient and the IRS when the payment(s) have not met the reporting threshold.
