The IRS recently announced a delay in the $600 reporting threshold for third-party settlement organizations, which had been in effect for the 2022 calendar year.
As a result, the IRS says third-party settlement organizations will not have to report tax year 2022 transactions on a Form 1099-K, Payment Card and Third-Party Network Transactions, to the IRS or the payee for the lower, $600 threshold amount enacted by the American Rescue Plan Act (ARPA) of 2021.
Until the changes enacted by ARPA, third-party settlement organizations had a de minimis exception to filing Form 1099-K with respect to payees with 200 or fewer transactions during the calendar year with an aggregate gross amount of $20,000 or less.
ARPA amended this de minimis amount to $600, with no minimum number of transactions, effective for calendar years beginning after Dec. 31, 2021.
In Notice 2023-10, the agency announced that it will regard the calendar year 2022 as a “transition period” for purposes of IRS enforcement and administration of the $600 de minimis exception for third-party settlement organizations and third-party network transactions.