To help you and your clients meet the correct reporting requirements in 2023, we are passing along the latest IRS announcement on the Form 1099-K reporting thresholds.
On December 23, 2022, the IRS announced a delay in applying the lowered reporting thresholds for third-party settlement organizations (TPSOs) set to take effect for the upcoming tax filing season.
As a result of this delay, third-party settlement organizations will not be required to report tax year 2022 transactions on a Form 1099-K to the IRS or the payee for the lower $600 threshold amount enacted as part of the American Rescue Plan of 2021.
While the existing Form 1099-K reporting threshold of $20,000 in payments from over 200 transactions will remain in effect, the IRS also released guidance outlining how transitions to the lower reporting thresholds will be made during the 2022 calendar year. Some lower threshold 1099-Ks may still be issued due to TPSOs working to change their systems, however; reporting thresholds do not affect the taxability of income.