In a Nutshell
Under updated tax rules, payment platforms like Venmo and PayPal must send 1099-K forms to sellers who had more than $20,000 in payments and 200 transactions in 2025. Learn more.If you get paid through apps like Venmo or PayPal, be aware that the IRS has updated its 1099-K reporting rules for the 2025 tax year.
Under the new guidelines, platforms such as Venmo and Cash App must issue Form 1099-K — which reports income received through third-party networks and payment cards — to anyone who receives more than $20,000 in payments and 200 transactions.
These rules don’t apply to personal payments between friends and family for things like shared meals or bills. They’re intended for people with side gigs or small businesses who accept payments online and may not always be reporting all of their income.
Here’s what to know about the updated 1099-K rules, plus tips to consider ahead of the changes.
New requirements for 1099-K reporting
Under the One Big Beautiful Bill Act, payment processors like Cash App, Venmo and PayPal along with platforms like eBay and Etsy will have to send a 1099-K tax form to users who had more than $20,000 in payments and 200 transactions.
Making sense of Form 1099-K
You can expect to receive a Form 1099-K from third-party networks or financial institutions for income you earned through the platforms the previous year. Under IRS rules, you’re supposed to report any income listed on your Form 1099-K from your business — including things like selling items on eBay or mowing lawns in your neighborhood — on your income tax return.
Who is required to file?
If you earn income outside of a full-time job and get paid via Venmo, PayPal or Cash App, or other types of third parties, you should refer to your Form 1099-K to determine what income to declare.
This includes payments for personal items you sold, services you provided or property you rented through …
- Peer-to-peer payment platforms or digital wallets
- Online marketplaces
- Craft or maker marketplaces
- Auction sites
- Car sharing or ride-hailing platforms
- Real estate marketplaces
- Ticket exchanges or resale sites
- Crowdfunding platforms
- Freelance marketplaces
Gift money from friends and family or reimbursements for personal expenses don’t have to be reported since they aren’t considered taxable income.
Zelle doesn’t report to IRS
Unlike its competitors, Zelle facilitates direct bank-to-bank transfers — and doesn’t provide 1099-K forms to customers.
But if you’re using Zelle for business payments, you’re still required to report any income you receive via the platform that may be taxable — if you’re unsure what to report, it’s a good idea to reach out to a tax specialist.
How to prepare to file taxes
You can be proactive by carefully tracking your transactions and planning for them to be reflected as part of your tax bill.
Save for taxes or make payments
Income taxes must generally be paid as you earn or receive income throughout the year, either through withholding or estimated tax payments. If you’re in business for yourself, you generally need to make estimated tax payments.
Keep good records
If you expect to receive a Form 1099-K, be sure to keep updated records of your transactions, balance sheet and other financial documents. Otherwise, inaccuracies when filing could trigger an IRS audit.
If you receive some or even all of your business income through a peer-to-peer payment platform, it’s a good idea to set up separate third-party platforms for business and personal transactions. If the transactions are intermingled, it will be tougher to separate business and personal payments.
Next steps
If you’re a gig worker or own a small side business, you may want to consider reaching out to a professional bookkeeper or accountant to help understand what your tax liability might be.
If you take steps now to prepare, you can be more confident about filing an accurate return and avoid processing delays.