If you sell products or services through platforms like PayPal, Venmo, Etsy, eBay, or Shopify, the IRS has introduced a new rule you cannot ignore: the reporting threshold for Form 1099-K is dropping. Here’s what it means for you and how to prepare.
What Is Form 1099-K?
Form 1099-K is an IRS information return used to report payments received via third-party networks (like credit cards or payment apps). In the past, these platforms were only required to send a 1099-K if:
- You had over $20,000 in gross payments, and
- Completed more than 200 transactions in a calendar year.
That’s now changing.
What’s Changing?
New IRS Threshold
Starting with tax year 2025, the IRS has lowered the reporting threshold for Form 1099-K to:
- $600 in total payments — regardless of the number of transactions.
This means even a single sale over $600 will trigger a 1099-K.
Who Does This Affect?
The new threshold impacts:
- Online sellers using platforms such as eBay, Etsy, Amazon, or Poshmark
- Freelancers and gig workers using PayPal, Venmo, or Stripe
- Small businesses that rely on payment processors to collect customer payments
- Anyone who receives over $600 in goods or services payments via third-party platforms
⚠️ Personal payments, like splitting dinner with friends or receiving gifts, are not included.
Why It Matters
This change may surprise casual sellers who never received tax forms before. For example, if you sell an old laptop for $700, you’ll now receive a 1099-K — and the IRS will expect that income to be reported.
Looking Ahead
The IRS delayed this lower threshold rollout several times. However, starting in 2025, the $600 rule will be fully enforced. As a result, more filers will receive 1099-Ks, and there will be increased scrutiny on unreported income.
Stay Compliant with 1099-K Software
Whether you’re a part-time seller or a full-time entrepreneur, staying compliant is now more important than ever. Digital payment platforms must report more data — and you must keep accurate records.
👉 Our 1099-K software makes filing easy. It helps you stay IRS-compliant, reduce errors, and file confidently.