The 1099-k threshold for 2025 and 2026 is $20,000 in gross payments and more than 200 transactions in a calendar year, not the $600 figure you may have heard about. Maybe you sold a few hundred dollars of stuff on eBay. Maybe you got paid through Venmo for a side gig and braced for a form once you crossed a couple hundred bucks. Either way, that lower number never took effect. Congress killed it in 2025. Track your self-employment tax on 1099 income anyway, because the reporting threshold and your actual tax bill are two different things.
What Is the 1099-K Threshold for 2026?
For 2026, the 1099-k threshold is $20,000 in gross payments and 200-plus transactions in a calendar year, the same rule that applied before 2022. Per the IRS's own Form 1099-K page, a third-party settlement organization has to send you the form once “the total amount of payments you receive for goods or services through the platform exceeds $20,000 in more than 200 transactions.” A “third-party settlement organization” is the IRS's term for a payment app or online marketplace, not a bank you deposit checks into directly.
Both conditions have to be true. $25,000 of inventory sold in 15 transactions doesn't trigger the form. Neither does 300 transactions that add up to $8,000. You need to clear both the dollar amount and the transaction count, in the same calendar year, on the same platform. Companies can still send you a 1099-K below that line if they want to. Getting one early doesn't mean the federal threshold moved for you specifically, only that the platform reports more conservatively than it has to.
Why the 1099-K Threshold Keeps Changing
This number has genuinely moved four times in five years, so don't feel behind if it seems to shift every time you check. In 2021, the American Rescue Plan Act (ARPA) set a new threshold: $600, no transaction minimum, starting with the 2022 tax year. Enforcement never actually started. Twice the IRS postponed it, then tried phasing it in gradually instead of dropping straight to $600. Signed July 4, 2025, the One, Big, Beautiful Bill (OBBBA) ended the phase-in for good. OBBBA retroactively restored the original $20,000 and 200-transaction rule.
| Tax year | 1099-K threshold | What happened |
|---|---|---|
| 2021 and earlier | $20,000 and 200+ transactions | The original, pre-ARPA rule. |
| 2022 | $20,000 and 200+ transactions (delayed) | ARPA set $600, no transaction minimum, but the IRS postponed enforcement first. |
| 2023 | $20,000 and 200+ transactions | The IRS kept the old threshold in place for a second year. |
| 2024 | $5,000, no transaction minimum | First phase-in step toward the $600 ARPA figure. |
| 2025 (planned, never happened) | $2,500 | Second phase-in step under Notice 2024-85, en route to $600 in 2026. |
| 2025 and 2026 (actual) | $20,000 and 200+ transactions | OBBBA repealed the phase-in and reinstated the original threshold. |
So $600, $2,500, and $5,000 were real, official plans, not internet rumors. Nearly all of them got repealed before they ever applied to a full tax year. Plan around $20,000 and 200 transactions for your 2025 and 2026 returns, unless Congress changes the law again.
No 1099-K? You Still Owe the Tax
You still owe tax on the income. This threshold decides whether a company has to report your payments to the IRS, not whether your income is taxable. IRS guidance is blunt about it: no matter the amount of reported payments, if you receive payments for selling goods or services, you must report all income on your tax return. Staying under $20,000 and 200 transactions doesn't create a tax-free zone. In practice, the platform just doesn't have to tell the IRS about it for you.
Plenty of side-hustle sellers get this backward, treating the threshold like a cap on how much they can earn before taxes kick in. It isn't. Running a real side business means tracking your own gross income and expenses from day one, the same way you would if a 1099-K never showed up. Our guide to paying quarterly estimated taxes covers the next step, once that income gets steady enough that you owe money throughout the year, not just at filing time.
Personal Payments vs. Taxable Income
Money from friends or family for a gift, a loan repayment, or a shared personal expense shouldn't land on a 1099-K in the first place. Per IRS guidance, money received from friends and family as a gift or repayment for a personal expense should not be reported on a Form 1099-K. Splitting a dinner check, collecting a birthday gift, and getting reimbursed by a roommate for the electric bill are examples the IRS calls out by name as non-reportable.
Payment apps can't always tell the difference on their own, though. Most let you mark a transfer as “friends and family” or “personal” instead of “goods and services,” and that flag is what keeps it out of your reported total. Skip that step on a big Venmo request from your roommate, and it can get lumped in with real sales activity, inflating your 1099-K for no reason. Tag personal transfers correctly every time, not just when you remember to.
Personal Items Sold at a Loss: Are You Taxed?
No, and this is the scenario that spooks the most casual sellers. Clearing out a closet on Poshmark isn't the same as running a shop, and the IRS treats it differently. Its own guidance limits taxable income to “personal items such as clothing or furniture sold at a gain.” Almost everything you sell used goes for less than you originally paid. Usually that means no gain and nothing to report, even if a 1099-K arrives showing the full sale price.
Purchase price never appears on the form, only what you were paid, so it can't distinguish a profitable resale from a closet clearout sold at a loss. Combined sales on one platform can still cross $20,000 and 200 transactions even when every item sold for less than you paid for it. When that happens, keep receipts, old purchase screenshots, or even a reasonable estimate. That paper trail shows your basis was higher than the sale price, and it's worth more than the form itself if the number ever gets questioned.
Which Apps and Platforms Send a 1099-K
Payment apps and online marketplaces send a 1099-K once a seller crosses $20,000 and 200 transactions in a year. Venmo, PayPal, Cash App for business profiles, eBay, Etsy, StubHub, and Airbnb all work this way, anywhere you're paid for goods or services rather than just moving your own money around. Card processors are a separate case: they send a 1099-K to any merchant who accepts card payments, regardless of dollar amount or transaction count, because that rule was never tied to the ARPA threshold fight.
Sell across more than one platform, and the math changes too, because the threshold applies separately to each one. $12,000 on Etsy and $15,000 on eBay in the same year might mean no 1099-K from either, even though your combined sales cleared $20,000. None of that changes whether the income is taxable. Only who tells the IRS about it changes, and when.
Handling a 1099-K When It Arrives
- Match it against your own records. Gross payments, not profit, are what the form reports. Compare it to your sales log before you assume it's your taxable income.
- Separate personal payments you forgot to flag. Money from a roommate's rent transfer or a gift can get swept in. Document it so you can back it out of your business income.
- Report gross income, then deduct real expenses. Freelancers and sellers typically report 1099-K income on Schedule C and subtract legitimate business costs, not the raw 1099-K figure.
- Ask the issuer for a correction if it's wrong. Since the IRS gets a copy too, a mismatched form invites a mismatch notice later. Contact the platform directly instead of ignoring the error.
- Keep the form and your records for at least three years. Three years is roughly how far back the IRS can ask questions about a return.
State 1099-K Thresholds Can Differ
Some states do set their own line, requiring a 1099-K at a lower dollar amount or transaction count than the federal $20,000 and 200-transaction rule, purely for state tax reporting. Everything in this guide covers the federal number, the one that triggers IRS reporting. State thresholds get set independently and change on their own schedule. Check your state's department of revenue directly if you're close to a state-specific line, rather than assuming the federal rule is the only one in play.
Conclusion
The 1099-k threshold for 2025 and 2026 is $20,000 and 200 transactions, the original rule restored after a three-year detour toward $600. Treat that number as a reporting trigger, not a tax-free allowance. Every dollar of real business income is reportable whether or not a form ever lands in your inbox. Building a side hustle into something steadier? Our guides on opening a business bank account for your side hustle and the QBI deduction for freelancers are good next stops, alongside the rest of our taxes coverage for anyone earning outside a W-2.