IRS Delays Implementation of $600 threshold for 1099-K

Posted on January 5, 2023January 30, 2023

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, dseaman@nullaafcpa.com; Ernest Carruthers, CPA, MST at 774.512.4122, ecarruthers@nullaafcpa.com; or your AAFCPAs tax advisor.

About the Authors

Daniel Seaman, CPA

Dan is a leader in AAFCPAs’ Tax Practice advising select clients, including high-net-worth individuals along with their families and business interests. He works extensively with AAF Wealth Management clients, helping to ensure the seamless execution of their holistic financial plans. He navigates the intricacies of compliance, taxation, wealth optimization, asset protection & privacy. Since joining the firm in 2007, Dan has embraced AAFCPAs’ integrated service model as key to client success. He recognizes that this combination of tax and wealth management expertise leads to better-informed decisions, increased tax efficiency, and an enhanced client experience—all contributing to greater success in achieving a clients' financial goals.

Ernest Carruthers, CPA, MST

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.