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Form 1099-K: the $20,000 threshold, and what to do
The threshold went back to $20,000 and 200 transactions. The rule that matters more did not change: income is taxable whether or not a form arrives, and money from family is not income at all.
Work out a gain or loss as a percentageThe threshold is $20,000 and 200 transactions
Both have to be exceeded before a form is required.
The IRS announced in IR-2025-107 that the One, Big, Beautiful Bill retroactively reinstated the threshold that applied before the American Rescue Plan Act of 2021. Payment apps and online marketplaces — third party settlement organizations, in IRS language — are not required to file Form 1099-K unless the payments to a person for goods or services exceed $20,000 and the number of transactions exceeds 200. The $600 threshold set by that 2021 law no longer applies.
Two caveats. A platform may send you a 1099-K for smaller amounts anyway. And payment card processors are different: if customers pay you directly by credit, debit, or gift card, you get a 1099-K from the processor however many payments you received.
Who sends one
More kinds of platforms than people expect.
The IRS lists the kinds of platforms through which payments can be reported: payment apps, online community marketplaces, craft or maker marketplaces, auction sites, car sharing or ride-hailing platforms, ticket exchange or resale sites, crowdfunding platforms, and freelance marketplaces. Each sends its own form, so selling on two sites can mean two 1099-Ks. Copies go to you and to the IRS, and yours is due by January 31.
What is taxable
Income is taxable with or without the form.
The IRS is direct about this: whether or not you receive a Form 1099-K, you must report income on your tax return, including payments for goods you sell and services you provide. How depends on what the payments were for:
| What you sold | Taxable? | Where it goes |
|---|---|---|
| Personal items sold for less than you paid | No; the loss is not deductible either | Top of Schedule 1, or Form 8949 |
| Personal items sold for more than you paid | Yes, the gain | Form 8949 and Schedule D |
| Goods, services, or gig work as a business or hobby | Yes | Generally Schedule C |
| Gifts or repayments from friends and family | No | Should not be on a 1099-K |
Report losses and gains on personal items separately if you had both. A couch bought for $1,200 and sold for $400 is a loss: nothing is owed on it.
The gross amount is not your profit
Box 1a is before fees, refunds, and shipping.
The gross payment amount in box 1a is the total value of the payments. The IRS notes it is not adjusted for fees, credits, refunds, shipping, cash equivalents, or discounts — none of which is taxable income, and all of which you can deduct from the gross amount. Keep the platform’s own reports and your receipts, especially what you originally paid for personal items, because that cost is what turns a reported sale into a loss instead of income.
If the form is wrong
Ask the issuer, keep records, and file on time.
If a 1099-K reports personal payments from family or friends, does not belong to you, or duplicates another form, the IRS says to contact the issuer named as “Filer” at the top left, ask for a corrected form showing zero, and keep the original and your correspondence. If the taxpayer identification number or the gross amount is wrong, ask for a corrected form as well. Do not wait for the correction to file your return. To keep personal payments off the form in the first place, mark them as non-business in the app where it gives you the option.
3 SOURCESSource ledger
Check the basis.
QUESTIONS THIS ANSWERS
Questions this answers
What is the Form 1099-K threshold?
Payment apps and online marketplaces must file Form 1099-K when a payee receives more than $20,000 for goods or services in more than 200 transactions. The 2025 tax law retroactively reinstated that threshold. They may still send a form for lower amounts.
Do I pay tax on items I sold for less than I paid?
No. A loss on a personal item is not deductible, but it is not taxable either. The IRS lets you zero out the reported amount at the top of Schedule 1 or report the loss on Form 8949. A personal item sold for more than you paid is a taxable gain.
Is money from friends and family on a payment app taxable?
No. The IRS says gifts and repayments for shared personal expenses, such as splitting a meal or a roommate paying rent, should not be reported on Form 1099-K and are not taxable income.