If you use any of the available cash apps receive payments, you may have received a Form 1099-K from any of the Third Party Networks. In 2022 the IRS originally set the threshold at requiring the issuance of Form 1099-K at $600.00. The IRA subsequently revised this low threshold pending “further studies” to determine a fair threshold.
Here is a recent release notice from the IRS with some new information and frequently asked questions for taxpayers:
Issue Number: IR-2024-33
IRS revises and updates frequently asked questions about Form 1099-K
WASHINGTON — In an effort to provide more resources for taxpayers during this filing season, the Internal Revenue Service today revised frequently asked questions (FAQs) for Form 1099-K, Payment Card and Third Party Network Transactions in Fact Sheet FS-2024-03.
The revised FAQs provide more general information for taxpayers, including common situations, along with more clarity for industry and what organizations should send Forms 1099-K. The FAQs are in addition to a recently updated Understanding your Form 1099-K on IRS.gov page and other communications resources.
Following feedback from taxpayers, tax professionals and payment processors, and to reduce taxpayer confusion, the IRS announced on Nov. 21, 2023, Notice 2023-74 to delay the new $600 Form 1099-K reporting threshold for third party settlement organizations for calendar year 2023.
As the IRS continues to work to implement the new law, the agency is treating 2023 as an additional transition year, which applies to taxes filed this year. As a result, reporting will not be required unless the taxpayer receives over $20,000 and has more than 200 transactions in 2023, although taxpayers may still receive a form for amounts less than the required reporting amount.
The updates to the FAQs contain substantial changes within each section:
- General Information
- What to Do If You Receive a Form 1099-K
- Common Situations
- Third Party Filers of Form 1099-K
- Should My Organization Be Preparing, Filing and Furnishing Form 1099-K?
More information about taxpayer reliance on guidance published in the Internal Revenue Bulletin and FAQs is available.