Form 1099-K $600 Reporting Threshold Delayed by IRS

On December 23, 2022, the Internal Revenue Service announced that a third-party settlement organization (TPSO) will not be penalized for failing to file, or failing to furnish, Forms 1099-K that exceed a minimum threshold of $600 in aggregate payments, irrespective of the number of transactions for the 2022 tax year. The calendar year 2022 will be considered a transition period for the implementation of the $600 threshold. The change of the rules is in response to raised concerns over the implementation timeline for TPSOs.

One caveat to this change is that a Form 1099-K must still be filed with the IRS and furnished to the recipient if backup withholding was performed in the calendar year for payees with “total payments to and withholding” exceeding $600 in the 2022 calendar year.

Review the IRS announcement and Notice 2023-10 for more details:

https://www.irs.gov/newsroom/irs-announces-delay-for-implementation-of-600-reporting-threshold-for-third-party-payment-platforms-forms-1099-k

https://www.irs.gov/pub/irs-drop/n-2023-10.pdf

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