IRS Delays Implementation of $600 threshold for 1099-K

AAFCPAs would like to make clients aware, the IRS recently announced a delay of the new 1099-K reporting requirements for calendar year 2022.  As a part of The American Rescue Plan Act of 2021 (ARPA), third-party settlement organizations (e.g., PayPal, Venmo, etc.) were required to issue a form 1099-K for those receiving more than $600. This requirement has been postponed until calendar year 2023.

With this delay in place, the old rule remains in effect for 2022, which requires 1099-K forms to be issued when 200 transactions and $20,000 in payments have been processed in a given year.

When the new rule comes into effect in 2023, taxpayers will need to track the purpose of payments received. Payments for reimbursements or small gifts will be treated differently for tax purposes than those for a product or service. In any case, you will receive a 1099-K if the transactions amount to over $600.

If you have questions, please contact Daniel Seaman, CPA at  774.512.4025,; Ernest Carruthers, CPA, MST at 774.512.4122,; or your AAFCPAs tax advisor.

About the Authors

Daniel Seaman
Dan specializes in providing tax planning & compliance solutions for individuals, families and fiduciaries, helping AAF clients to safeguard and maximize their personal and family wealth.  He advises clients on year-end and multi-year tax planning strategies, including: minimizing the impact of the Alternative Minimum Tax (AMT); planning for mutual fund dividends and capital gains; estate & gift tax planning; maximizing charitable giving strategies; planning for estimated tax payments; minimizing the net investment tax; and minimizing overall taxes between generations of a family. Dan also provides tax planning & compliance solutions for privately-held businesses in a variety of commercial industries, including: high tech, software, manufacturing & distribution, professional services, physicians & private practice, retail and real estate.
Ernest Carruthers
Ernie provides proactive tax planning & compliance solutions for high-net-worth individuals, families, and trusts. He engages AAFCPAs’ clients in discussions to identify evolving personal circumstances and goals and determines how these impact short and long-term strategic tax planning efforts. He is fully committed to staying on top of the constant changes to federal and state tax codes to ensure clients do not have to pay a penny more than what is required.