The Internal Revenue Service (IRS) recently proclaimed that it will postpone the imposition of a new tax rule which would have affected American users of third-party payment apps such as Venmo or PayPal.

These users, whose online earnings would have surpassed $600 in a year, are granted a reprieve thanks to the IRS's decision.

Originally accepted as part of the American Rescue Plan by Democrats in March 2021, this policy would have compelled such platforms to supply both the IRS and users with Form 1099-K in cases of annual transactions crossing the $600 mark. Now, the IRS has resolved to regard 2023 as a 'transition year'.

Thus, the requirement of Form 1099-K has been raised to cases where gross income exceeds $20,000, or, when 200 standalone transactions have occurred in a single year. This updated reporting threshold rises to $5,000 in the year 2024.

The IRS decision to postpone the reporting threshold is not an unprecedented move. Emphasizing the importance of a gradual approach to policy adoption, IRS Commissioner Danny Werfel expressed his support for the delay and the positive impact it could have on tax administration.

The Internal Revenue Service (IRS) recently proclaimed that it will postpone the imposition of a new tax rule which would have affected American users of third-party payment apps such as Venmo or PayPal.
These users, whose online earnings would have surpassed $600 in a year, are granted a reprieve thanks to the IRS's decision.
Originally accepted as part of the American Rescue Plan by Democrats in March 2021, this policy would have compelled such platforms to supply both the IRS and users with Form 1099-K in cases of annual transactions crossing the $600 mark. Now, the IRS has resolved to regard 2023 as a 'transition year'.
Thus, the requirement of Form 1099-K has been raised to cases where gross income exceeds $20,000, or, when 200 standalone transactions have occurred in a single year. This updated reporting threshold rises to $5,000 in the year 2024.
The IRS decision to postpone the reporting threshold is not an unprecedented move. Emphasizing the importance of a gradual approach to policy adoption, IRS Commissioner Danny Werfel expressed his support for the delay and the positive impact it could have on tax administration.

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