Tax season: What is the 1099-K form, and what’s different this year?
(NewsNation) — Fewer side hustlers who get paid through such apps as Venmo or PayPal will get a tax form this year, but the IRS still expects them to report the money they made.
That’s because the threshold for receiving a 1099-K tax form has returned to $20,000 under the One Big Beautiful Bill Act, scrapping plans for thresholds as low as $600 under previous legislation.
But the change only affects who gets the form — and what gets shared directly with the IRS — not whether the income is taxable.
Which tax bracket are you in, and how much is the standard deduction?
“Even if you don’t get a Form 1099-K, if you received payments for goods, services or property, you must report your income,” the agency warns.
For 2025, the current filing season, taxpayers should expect a 1099-K if they received more than $20,000 in payments for goods and services and had more than 200 separate transactions through an online marketplace like eBay or a payment app such as Venmo.
The 1099-K doesn’t apply to personal payments between friends and family for things like splitting dinner or sending a gift, but understanding the form can be important for the millions of Americans earning money through side hustles or getting paid in different ways.
What is a 1099-K tax form?
The 1099-K is a tax document that reports the money you received for goods and services through payment apps or online marketplaces during the year.
That includes sellers on platforms like StubHub or eBay, or such workers as barbers and tutors who may take payments through apps like Venmo.
When will people receive tax refunds? What to know
Each year, those platforms are required to fill out 1099-K forms and send them to the IRS for people who meet certain criteria. For tax year 2025, the threshold is $20,000 and more than 200 transactions — up from $5,000 in 2024.
Some states have lower reporting thresholds, so you might still receive a 1099-K even if you made less. Those states include Illinois, Maryland, Massachusetts, Vermont and Virginia.
A few other things to keep in mind:
You’ll receive a 1099-K if customers or clients paid you by credit, debit or gift card, regardless of the amount.
A copy of the form is sent to you by Jan. 31.
If you used multiple apps, you could receive multiple forms.
How to use a 1099-K if you get one
The 1099-K is an informational document meant to help you complete your income tax return. How you report the money depends on what the payments were for.
According to the IRS, here’s how most people should handle a 1099-K:
Gig worker, freelance work, hobby seller: Report the 1099-K info on Schedule C with the rest of your business earnings.
Personal items sold at a gain: If you sold something for more than you originally paid, the profit is taxable and should be reported on both Form 8949 and Schedule D.
Sometimes a 1099-K includes payments that weren’t actually for goods and services, like a Venmo for a friend’s birthday dinner. If that happens, the IRS says you should:
Contact the payment platform and ask for a corrected form
Keep a copy of the original form and any correspondence with the issuer
What happens if you ignore a 1099-K?
Ignoring a 1099-K is a fast way to trigger a tax notice from the IRS.
The agency already receives a copy from payment platforms, and if you leave it off your return, the IRS may treat the entire amount as unreported income — even if some of it wasn’t taxable.
Remember, the higher $20,000 threshold for 2025 only affects who receives the form. Taxpayers are still required to report their income on their returns, 1099-K or not.
Source: abc27 News