The IRS again delayed the effective date of the $600 threshold for Form 1099-K reporting for third-party settlement organizations (TPSOs) and will treat 2024 and 2025 as transition years.
Under Notice 2024-85, the IRS will require a TPSO to report payments in settlement of third-party network transactions when the amount of total payments for those transactions is over $5,000 during calendar year 2024; over $2,500 during calendar year 2025; and over $600 during calendar year 2026 and after.
The IRS said the extended transition period is meant to ease the transition for TPSO compliance with Sec. 6050W(e) and participating payee compliance with income tax reporting.
The IRS estimates that it will receive 44 million Forms 1099-K, Payment Card and Third Party Network Transactions, under the $600 threshold, more than three times the 14 million it received in 2023. Read more.