What Is a 1099-K? The 2026 Threshold Explained

A Form 1099-K is an information return that reports the money you received for goods and services through payment cards and payment apps such as PayPal, Venmo, Stripe, Etsy, and eBay. For tax year 2025 and later, a payment app only has to send one if you received more than $20,000 across more than 200 transactions, after the One Big Beautiful Bill Act restored the old threshold in July 2025. The income is taxable whether or not the form ever arrives.

What Form 1099-K actually reports

The 1099-K comes from the company that moved the money, not from your customer. The IRS calls these companies third-party settlement organizations, which is a mouthful for marketplaces and payment apps: PayPal, Venmo, Cash App for Business, Stripe, Square, Etsy, eBay, Airbnb, Uber, DoorDash, Ticketmaster, and hundreds more. If you take card payments directly through a merchant account, the card processor sends one too.

The number in Box 1a is gross. That is the headline most sellers miss. It is the total of every payment that settled to you before the platform took its cut, before refunds, before shipping labels, and before the customer's sales tax was stripped out. An Etsy shop that sold $28,000 of product and netted $21,000 after fees and refunds will still see roughly $28,000 on the form. Your job at tax time is to report the gross figure and then deduct the fees and refunds as business expenses, so the amount you actually pay tax on is the real profit.

Platforms must furnish the form by January 31 following the tax year, and they send a matching copy to the IRS. That copy is why the form matters: the IRS runs an automated comparison between what platforms reported and what you put on your return.

What is the 1099-K threshold for 2025 and 2026?

The federal threshold is more than $20,000 in payments and more than 200 transactions in the same calendar year, and you have to cross both. This is the rule for tax year 2025, tax year 2026, and going forward. It is also the rule that existed before 2022, which is why you may remember it.

The threshold whipsawed for four years, so here is the whole history in one place.

The American Rescue Plan Act of 2021 had dropped the threshold to $600 with no transaction minimum. The IRS delayed that rule three separate times, phasing in $5,000 for 2024 and planning $2,500 for 2025 before a $600 floor in 2026. The One Big Beautiful Bill Act, signed in July 2025, scrapped the phase-in entirely and reinstated the pre-2022 threshold retroactively, so the $600 rule never took effect for anyone.

Two exceptions catch people out. First, payment card transactions have no threshold at all. If you accept credit or debit cards through a merchant account, you get a 1099-K for any amount, even $40. Second, if the platform applied backup withholding to your payments because your taxpayer ID was missing or did not match, it must issue the form regardless of how little you received.

Plenty of platforms also send the form voluntarily below the threshold, because it is simpler than tracking who qualifies. Getting one does not mean you crossed $20,000.

Which states have lower 1099-K thresholds?

Several states never adopted the federal number and require platforms to report at much lower amounts. If you live in one of these, you can receive a 1099-K on a few hundred dollars of sales while a seller in a neighboring state receives nothing.

State rules change more often than the federal one, and a few states have proposed their own thresholds since. The practical takeaway is the same either way: the reporting threshold controls whether a form gets mailed, not whether the money is taxable. If you are filing in more than one state, our guide on filing taxes in two states covers how the returns fit together.

1099-K versus 1099-NEC versus 1099-MISC

Getting more than one form for the same year is common, and so is getting two forms for the same dollar. The difference is who paid and how.

Double reporting happens when a client pays your invoice with a credit card through a platform. The client should not also issue a 1099-NEC for a card payment, but some do anyway. If that happens, you report your actual income once, keep the documentation showing the overlap, and do not simply add the two forms together. Our explainer on what a 1099 is walks through the whole family of forms, and how much tax you pay on 1099 income covers the self-employment tax side.

Do you have to report income if you did not get a 1099-K?

Yes. The threshold governs the platform's paperwork obligation, not your tax obligation. Income from selling goods or providing services is taxable when you earn it, whether you received $800 or $80,000 and whether a form arrived or not. The IRS states this plainly on its own 1099-K page.

This is the single most expensive misunderstanding of the 2025 change. When the threshold went back up to $20,000, a lot of small sellers concluded their income had become tax free. It did not. The IRS simply has less automated visibility into it, and underreporting still carries penalties and interest if it surfaces later. Because most sellers now fall below the reporting line, keeping your own record of what each platform actually paid you matters more than it used to, and a simple income tracker built for creators and online sellers beats reconstructing a year of payouts in April.

What to do if your 1099-K is wrong or includes personal payments

A 1099-K should never include money friends sent you for concert tickets or your share of dinner. Those are personal transfers, not payments for goods and services, and they are not taxable. They end up on the form when someone pays you through the goods-and-services option by mistake, or when a personal account gets flagged as a business one.

The IRS instruction is specific. Contact the issuer and ask for a corrected Form 1099-K showing a zero amount, and keep a copy of the request. Do not contact the IRS about it, because the IRS cannot correct someone else's information return. File on time even if the corrected form never comes, and report the amount as other income at the top of Schedule 1 with the description the IRS specifies, then back the same amount out as an offsetting adjustment further down the schedule, so the total washes to zero and the form still matches your return.

Selling used personal property follows a similar path. If you sold your old couch for less than you paid, that is a loss on a personal item: it is not deductible, but you report and offset it the same way so you are not taxed on the gross proceeds. If you sold something for more than you paid, such as a collectible or a resale item that appreciated, that is a capital gain and it belongs on Form 8949 and Schedule D. TaxFile does not currently prepare Schedule D or Form 8949, so that situation needs a preparer or software that handles capital gains.

How TaxFile handles a 1099-K

Upload the form and TaxFile reads Box 1a, asks what the gross figure actually represents, and puts it where it belongs. For a business or side hustle that means Schedule C, where the platform fees, refunds, shipping, cost of goods, and your other expenses come off the top so you pay tax on profit rather than on gross settlements. It calculates self-employment tax on the result, checks the deductions and credits you qualify for, prepares your federal and state returns together, runs an error check, and e-files through an authorized IRS e-file provider only after you review and approve every line.

Pricing is $39 for a simple return, $89 for self-employed, and $199 for business, plus $19 per state return. There is no free tier. If most of your income comes through platforms, 1099 tax filing and self-employed tax filing cover what the software does in more detail, and drivers and couriers should start with Uber and DoorDash taxes. TaxFile is self-prepared tax software and does not provide personalized tax advice.

Frequently asked questions

Do I have to report a 1099-K on my taxes?

Yes. Any 1099-K you receive was also sent to the IRS, so the income needs to appear on your return. Report the gross amount from Box 1a and then deduct platform fees, refunds, and business expenses against it, usually on Schedule C. If the form is wrong or covers personal transfers, still report it and offset it rather than leaving it off.

What happens if I don't report my 1099-K?

The IRS matches information returns against filed returns automatically. A missing 1099-K usually triggers a CP2000 notice proposing extra tax on the full gross amount, plus interest and often an accuracy penalty. Because Box 1a is gross rather than profit, the proposed bill is typically far larger than what you actually owed, and you then have to prove your expenses after the fact.

Do I have to pay taxes on Venmo and PayPal payments?

You owe tax on payments you received for goods or services, regardless of the app and regardless of whether a 1099-K arrives. Personal transfers between friends and family, gifts, and reimbursements are not taxable and should not be reported on a 1099-K. Marking personal payments correctly inside the app is the easiest way to keep the two separate.

Is a 1099-K considered income?

A 1099-K is not income by itself; it is a record of payment volume that flowed to you. The taxable amount is what you actually earned after refunds, platform fees, and the cost of what you sold. Reselling personal items at a loss produces no taxable income even though the gross shows up in Box 1a.

Will I get a 1099-K for 2026?

Only if you receive more than $20,000 in payments across more than 200 transactions on a single platform, or you live in a state with a lower threshold such as Maryland, Massachusetts, Vermont, Virginia, or Illinois. Direct card processing has no threshold, so merchants who accept cards receive one at any amount. Many platforms also issue the form voluntarily below the limit.