Etsy, eBay, PayPal Want IRS 1099-K Relief for Online Sellers
Companies like eBay, Etsy, and PayPal want Congress to raise the $600 reporting threshold for IRS Form 1099-K to give relief to millions of sellers who use their sites.


Online shopping sites like Etsy, and eBay, and payment network PayPal, among other companies want Congress to change the new $600 reporting threshold for IRS Form 1099-K. The rule, which won't apply for 2023 due to a recent delay from the IRS, affects millions of people who sell on sites like Etsy and Poshmark and get paid through third-party networks like PayPal, Square, and CashApp.
Previously, to receive a 1099-K, you had to have at least 200 third-party payment network transactions totaling more than $20,000 in gross payments. However, due to a tax law change, a single transaction on a payment network of just $600 could trigger a 1099-K. Some people call this the “600 rule.” The IRS delayed the rule Implementation last year, but that change and the most recent 1099-K delay for the 2023 tax year continue to cause confusion.
The Coalition for 1099-K Fairness (a group of online marketplaces that oppose the new rule) has urged Congress to get involved. The goal is to have bipartisan legislation that raises the 1099-K threshold, giving relief to “casual sellers.” That includes millions of people who are paid smaller amounts through third-party networks and haven’t received 1099-K forms in the past.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
More: IRS Form 1099-K: When You Might Get One From Venmo, PayPal, or Cash App
Is the IRS unfairly targeting casual sellers?
PayPal, eBay, and Etsy are among several members of the 1099-K Fairness Coalition that want Congress to ensure that casual online sellers aren’t burdened with the IRS 1099-K form. The organization cites a national survey of sellers where:
- 70% of respondents said they would be deterred from selling online because of the $600 IRS 1099-K reporting requirement.
- 85% percent of those surveyed didn’t think that the IRS should be “targeting people who only occasionally sell online,” according to the survey.
Members of the Coalition for 1099-K Fairness include Aribnb, Bikelist, eBay, Eventbrite, Block, Inc. (for Square and CashApp), ETA, Etsy, Goldin, Kidizen, Mercari, Noihsaf Bazaar, OfferUp, PayPal, Poshmark, Inc., Reverb, Rover, Sports Fan Coalition, StubHub, TechNet, and Tradesy
According to the Coalition, many transactions casual sellers have “involve the sale of used goods that do not create any tax liability.” (Some of those goods are often sold for less than what the seller initially paid). The organization says on its website that a $600 1099-K threshold would disproportionately burden some taxpayers, who could be at risk of over-reporting their income or “forced to hire a tax professional” to ensure compliance with the reporting requirement.
The Coalition also points out that economic hardship is another factor for nearly 40% of online sellers. The majority (close to 75%) said they sell online to help pay for necessary personal expenses.
1099-K: What could Congress do?
The Coalition for 1099-K Fairness wants Congress to pass legislation that would increase the 1099-K reporting threshold. If Congress doesn’t act, the organization says millions of people with relatively small online businesses will receive 1099-Ks for the 2023 tax year. The coalition contends that could cause significant confusion and administrative challenges–not only for networks and sellers but also for the IRS.
In Congress, the Saving Gig Economy Taxpayers Act was reintroduced in the U.S. House of Representatives with bipartisan sponsorship.
- The legislation would repeal the IRS 1099-K $600 rule and restore the previous $20,000/200 transaction threshold.
- It’s unclear right now what will happen with the legislation, which is similar to proposals circulated in Congress in the past but failed to gain enough support to pass.
For now? The IRS in November, announced that the $600 1099-K reporting rule won't apply for the 2023 tax year. But remember that the IRS expects you to report all taxable income on your federal return, whether you receive a 1099-K or not.
Related

As the senior tax editor at Kiplinger.com, Kelley R. Taylor simplifies federal and state tax information, news, and developments to help empower readers. Kelley has over two decades of experience advising on and covering education, law, finance, and tax as a corporate attorney and business journalist.
-
Can I Stop Social Security and Restart it Later?
This articles explains what is required to stop and restart Social Security and details how to do it.
By Jacob Wolinsky Published
-
Six Estate Planning Tips for Younger Generations
Millennials and Gen Zers are taking their estate planning seriously. These tips can help make the process seem less daunting.
By David Weinstock, CFP®, AEP®, CPA Published
-
Capital Gains Tax on Real Estate and Home Sales
Capital Gains Tax Selling your home or a rental property? Here are important capital gains tax rules to keep in mind.
By Joy Taylor Published
-
Another Big IRS Tax Change for Online Sellers
Selling Online Just in time for the holidays, the IRS is delaying a significant tax 1099-K reporting requirement for 2023.
By Kelley R. Taylor Last updated
-
Tax-Deductible Black Friday Deals for the Self-Employed
Black Friday Deals Some Black Friday deals can help the self-employed save on business expenses and taxes.
By Katelyn Washington Published
-
Did You Overpay for Thanksgiving Dinner?
Thanksgiving 2023 marks the second most expensive Thanksgiving dinner in history. But how much it cost depended on what you bought, where you live — and whether your state taxes groceries.
By Katelyn Washington Last updated
-
Most Expensive States for Retired Military Service Members
Military Retirement Veterans can keep more of their military retirement pay by avoiding these high-taxed, most expensive states for retired service members.
By Katelyn Washington Last updated
-
2023 401(k) Contribution Deadline Coming Soon
401(k) Contributions Year-end is the deadline for making max 401(k) contributions that can increase your savings for retirement and help lower your tax bill.
By Kelley R. Taylor Last updated
-
10 Worst States To Retire in if You Hate Paying Taxes
State Taxes Relatively high tax burdens make these places the worst states to retire.
By Katelyn Washington Last updated
-
Charitable Donations: What To Know About Scams and Taxes Before You Give
Donations Giving to a charity can make you feel good and lower your tax bill, but the IRS says to beware of fake charities.
By Katelyn Washington Last updated