Reference · 2025–2026

The 1099-K Threshold for 2025 and 2026: The $20,000 Rule Is Back

K. Reynolds, CPA · Updated June 2026 · Source: Public Law 119-21, IRS Fact Sheet 2025-08

After years of confusion, the Form 1099-K threshold is settled again. For 2025 and beyond, a payment app or marketplace only has to send you a 1099-K if your payments for goods and services exceed $20,000 and more than 200 transactions. The One Big Beautiful Bill Act repealed the looming $600 rule and restored the old threshold. Here's the full story — and the one thing that hasn't changed.

What a 1099-K actually is

Form 1099-K reports payments you received for goods or services through a third-party platform — PayPal, Venmo, Cash App, Etsy, eBay, Stripe, and the like — or through payment cards. It's an information return: the platform sends a copy to you and to the IRS. It does not change what you owe; it just reports what flowed through the platform.

The threshold, year by year

The number has whipsawed, which is why there's so much confusion:

Tax year1099-K reporting threshold
2023 & earlierOver $20,000 and more than 200 transactions
2024Over $5,000 (no transaction minimum)
2025 and laterOver $20,000 and more than 200 transactions (restored)

The American Rescue Plan had lowered the threshold to a flat $600, and the IRS planned to phase it in ($2,500 for 2025, $600 for 2026). Those lower thresholds were repealed by OBBBA before they took full effect — so the $600 rule you may have heard about never actually applies.

The one thing that didn't change: your income is still taxable. Whether or not a 1099-K lands in your mailbox, money you earn selling goods or providing services must be reported on your return. A higher form-reporting threshold doesn't lower your tax — it just means fewer forms.

Selling or freelancing on the side?

Estimate the self-employment tax on that income before it surprises you at filing.

Self-Employment Tax Calculator →

Four caveats that still catch people

The 1099-NEC and 1099-MISC threshold also moved

Separately, OBBBA raised the reporting threshold for Form 1099-NEC and Form 1099-MISC — used for contractor and other nonemployee payments — from $600 to $2,000, starting with the 2026 tax year (indexed for inflation after that). So a business paying a freelancer $1,500 in 2026 won't need to issue a 1099-NEC, though the freelancer still owes tax on it.

What to do

Frequently Asked Questions

What is the 1099-K threshold for 2025 and 2026?

Over $20,000 and more than 200 transactions for goods-and-services payments through a third-party platform. OBBBA reversed the planned $600 threshold.

Do I owe tax if I don't get a 1099-K?

Yes — income is taxable whether or not you receive the form. The 1099-K is a report, not the trigger for the tax.

Did the $600 rule go away?

Yes. It never fully took effect and was repealed by OBBBA, which restored the $20,000/200 threshold for 2025 and beyond.

What's the 1099-NEC threshold for 2026?

It rises from $600 to $2,000 for the 2026 tax year, then indexes for inflation.

For tax professionals: the restored threshold comes from OBBBA §70432 (retroactive to 2022) and the IRS's revised FAQs in Fact Sheet 2025-08; the 1099-NEC/MISC change is OBBBA §70433. Confirm current state thresholds and the latest IRS instructions when advising clients.