Being under the threshold doesn’t mean the income is tax-free
The reporting threshold doesn’t determine whether income is taxable. You generally must report taxable income from selling goods or providing services whether or not you receive a Form 1099-K, so keep your own records. See the IRS’s Form 1099-K FAQs for more on specific situations.
Recent changes to the annual 1099-K threshold
The number bounced around for a few years before landing where it is now.
| Year | Threshold that applied |
|---|---|
| 2023 | $20,000 and more than 200 transactions |
| 2024 | $5,000, with no transaction minimum |
| 2025 | $20,000 and more than 200 transactions |
| 2026 | $20,000 and more than 200 transactions |
The current federal threshold
Both conditions have to be met before a TPSO is required to send you a form: your payments for goods or services need to top $20,000, and you need more than 200 separate transactions in the calendar year. The legislation restored the $20,000-and-more-than-200-transactions federal threshold for payments made after 2024.
Card payments
Credit, debit, and stored-value card processors don’t have a reporting threshold at all—they report every transaction they process, regardless of the dollar amount. This rule hasn’t changed and isn’t affected by the reversal that applies to TPSOs.
States with a lower threshold
A handful of states never adopted the higher federal number, such as:
| State | Threshold |
|---|---|
| District of Columbia | $600 |
| Illinois | $1,000 |
| Massachusetts | $600 |
| Maryland | $600 |
| Montana | $600 |
| Virginia | $600 |
| Vermont | $2,000 |
