Venmo, Cash App And Other Payment Apps To Report Payments Of $600 Or More

If you receive $600 or more payments in total for goods and services through a third-party payment network, such as Venmo, Cash App, or Zelle, these payments will now be reported to the IRS. Beginning Jan. 1, 2022, third-party payment networks will be required to send users Form 1099-K for transactions made by mail or electronically. This means you don’t have to worry just yet: The new tax reporting requirement will impact your 2022 tax return filed in 2023.

1099-K Threshold Change:

This new Threshold Change is currently only for payments received for goods and services transactions, so this doesn’t include things like paying your family or friends back using PayPal or Venmo for dinner, gifts, shared trips, etc.

This change was introduced in the American Rescue Plan Act of 2021, which amended some sections of the Internal Revenue Code to require Third-Party Settlement Organizations (TPSOs), like PayPal and Venmo, to report goods and services transactions made by customers with $600 or more in annual gross sales on 1099-K forms. Currently, a 1099-K is only required when a user receives more than $20,000 in goods and services transactions and more than 200 goods and services transactions in a calendar year.