IRS restores higher Form 1099-K reporting threshold

Updated IRS guidance explains how payment platforms, sellers, and taxpayers should handle Form 1099-K reporting, corrections, and personal transactions for 2025.

The IRS has officially reinstated the $20,000 and 200-transaction limit for when third-party payment platforms must issue Form 1099-K, undoing the lower $600 trigger that never took effect.

The new fact sheet, FS-2025-08, also explains how to correct wrong forms, report personal sales, and handle ticket-resale income.

Why It Matters

• Who it affects: Users of payment apps such as PayPal, Venmo, eBay, or Ticketmaster.

• Reporting rules: Only users crossing both the $20,000 and 200-transaction thresholds will get a Form 1099-K from those platforms. Credit- and debit-card processors still report all payments.

• Fixing mistakes: If you get a wrong 1099-K and can’t get it corrected, you can offset it on Schedule 1 of your tax return.

• Personal items: Selling used goods or concert tickets for less than you paid doesn’t create taxable income, but gains must be reported.

• Identification rules: Platforms must collect Social Security or Taxpayer ID numbers and may apply backup withholding if missing.

Overview

Fact Sheet FS-2025-08 replaces earlier 1099-K guidance (FS-2024-03). It summarizes the current federal reporting rules under Internal Revenue Code § 6050W, which require payment companies and online platforms to report certain payments to taxpayers and the IRS.

Key Updates

• Threshold reinstated:
  Third-party settlement organizations (TPSOs)—such as Venmo, PayPal, and similar platforms—must file Form 1099-K when:

  • total payments exceed $20,000 and

  • there are more than 200 transactions in a calendar year.

  Payment-card processors (for credit/debit cards) have no threshold—all reportable payments must be reported.

• State rules may differ:
  Some states have lower reporting thresholds. TPSOs must still follow those state laws even if federal limits are higher.

• Incorrect Form 1099-K:
  If you cannot get a corrected form, you may offset the error on Schedule 1 (Form 1040) following IRS examples (for instance, roommate rent reimbursements or personal transfers).

• Personal items:
  Selling used personal goods at a loss is not deductible. If you get a 1099-K for such a sale, report the amount on Schedule 1 to show it is non-taxable.
  If you sell for more than your cost, report the gain on Form 8949 and Schedule D.

• Ticket resales:
  Gains from resale are taxable, while losses are not. Platforms may require your Social Security number or Taxpayer Identification Number (TIN). Missing or incorrect TINs can trigger backup withholding, which must be reported on your tax return.

• Avoiding duplicate reporting:
  When the 1099-K rules cover a transaction, do not also report it on Form 1099-MISC or 1099-NEC.

Practical Takeaways

• TPSOs should adjust reporting systems for the $20,000/200-transaction threshold and confirm state-level differences.

• Payment platforms may still choose to issue Forms 1099-K below the threshold.

• Taxpayers should keep good records of cost basis and payment types to separate business, hobby, and personal transactions correctly.

• Ticket resale platforms must confirm TINs and apply backup withholding rules correctly.

FS-2025-08 is now the IRS’s official reference for Form 1099-K questions. It consolidates earlier guidance and provides uniform reporting thresholds, corrections, and ticket-resale treatment rules.

Bottom Line

Starting with 2025 filings, Form 1099-K reporting applies when third-party payments exceed $20,000 and 200 transactions. Payment cards have no minimum threshold. The IRS now provides clear steps for fixing errors and correctly reporting personal or ticket-sale transactions.