The 1099-K Reporting Threshold: What Happened to the "$600 Rule"

If you sell things online or get paid through apps like PayPal, Venmo or Cash App, you've probably heard about the "$600 rule". Here's what actually happened.

Checked October 1, 2026. Confirm the current threshold on the IRS 1099-K page before you file.

The short version

• The plan: a 2021 law lowered the threshold for payment apps and online marketplaces to send you a Form 1099-K from $20,000 and 200 transactions to just $600.
• What happened: the IRS repeatedly delayed it, phasing in lower thresholds instead.
• Where it ended up: the 2025 tax law restored the original threshold. Payment apps and marketplaces generally only have to send a 1099-K when you receive more than $20,000 and more than 200 transactions in a year.

What hasn't changed: income is still taxable

The threshold only decides whether a company has to send you a form. It doesn't change what's taxable. If you earn money from a side hustle, freelancing or selling things for a profit, you still have to report it, whether you get a 1099-K or not. See filing taxes with side-hustle income.

What isn't taxable

• Money from friends and family, like splitting rent or a dinner bill, or a gift.
• Selling personal items at a loss, such as a used couch you sell for less than you paid.

Mark personal payments as "friends and family" in the app where that option exists, so they aren't counted as business payments. See PayPal vs Venmo.

If you get a 1099-K you don't think you should have

1. Check whether it includes personal payments or reimbursements.
2. Keep records showing what each payment was for.
3. Report the 1099-K on your return and then subtract the non-taxable amounts as the IRS instructions explain, or ask the company to correct it.

FAQ

Will I get a 1099-K for $600 in Venmo payments? Generally no. For payment apps and online marketplaces, the reporting threshold is back to more than $20,000 and more than 200 transactions a year.

Do I have to pay tax if I don't get a 1099-K? If the money is income, yes. The form is just a reporting tool.

Do card payments to my business count? Payments processed by card processors follow separate rules and can trigger a 1099-K at any amount. Check the IRS page if you take card payments directly.