IRS Form 1099-K: Why You Might Not Get One From Venmo, PayPal, or Cash App For 2022

The IRS 1099-K $600 reporting threshold involving payment networks like Venmo, PayPal, Amazon, Square, and Cash App is on hold.

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(Image credit: Getty Images)

If you got paid more than $600 during 2022 for goods or services through a third-party payment network like Venmo, PayPal, Amazon, or Square, then due to a changed tax reporting rule, you were set to receive an IRS Form 1099-K from your payment network by January 31— even if you had never received a 1099-K in the past. That’s because the 1099-K tax reporting rule required third-party payment networks to send a 1099-K if those payments exceeded a new $600 reporting threshold.

But just before the end of 2022, the IRS delayed the implementation of the so-called $600 rule. The one-year delay came after lawmakers and advocacy groups expressed concern that millions of taxpayers would unexpectedly receive 1099-K forms and that some businesses and the IRS might not have been prepared for the onslaught of new reporting.

What does this mean for you if you were paid for goods and services through a third-party payment network? For now, this new delay of the $600 threshold means that for your 2022 tax return, a former, higher $20,000/200 transaction threshold will apply for goods and services that you received payment for through third-party payment networks during 2022. In other words, if your 2022 transactions meet the higher threshold, you should generally expect to receive a 1099-K form by the end of January.

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But when the $600 rule does go into effect, more people than in the past who have side hustles, and gigs, or part-time jobs, and businesses, and are paid through a wide-range of networks and apps like Venmo, Amazon, Square, and PayPal, (to name just a few), will eventually receive a 1099-K Form. (Although, It’s also important to note that a new reporting threshold doesn’t change the fact that the IRS has always required taxpayers to report all taxable income, whether they receive a 1099-K form or not.)

So, since the $600 rule is a key tax reporting change that could come around again for payments you receive in 2023, it’s good to have information about what IRS Form 1099-K is, and what a lower $600 threshold could mean for you going forward.

What is a 1099-K?

Form 1099-K is basically an IRS information reporting form. The form contains information, for your tax return, about the gross amount of payment transactions that you had on a third-party payment network when that amount exceeds $20,000 in the previous year. Companies that are required to send a 1099-K provide a copy to you, and to the IRS.

When will you receive a Form 1099-K? If you received more than $20,000 in payments for goods or services through third-party payment network transactions in 2022, you should expect to receive a Form 1099-K by January 31, 2023. The $600 reporting threshold has been delayed for one year.

If you receive a Form 1099-K, you will want to make sure that it matches the information that you have in your records. 

If there are any problems with your 1099-K (e.g., the amounts listed don’t belong to you or other information on the form is incorrect), you should contact the third-party payment network that sent the form. They might be able to issue a corrected 1099-K.

1099-K Threshold for 2022: What Triggers a 1099-K?

Previously, to receive a 1099-K from a third-party payment network, you had to exceed $20,000 in transactions for goods and services and have more than 200 business transactions in a year. So, for the 2022 tax year, that $20,000 threshold will apply. That's because the IRS is delaying the new $600 threshold for one year. 

That lower $600 threshold was originally scheduled to go into effect for the 2022 tax year, so that millions of people who hadn't received a 1099-K in the past would have received one.

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Will You Get a 1099K From Venmo, PayPal, or Cash App?

Some people are wondering if they will receive a 1099-K from Venmo, or PayPal for the 2022 tax year. The answer is maybe. Yes, the IRS is delaying the $600 rule tor the 2022 tax year, so not as many people will receive a 1099-K for 2022. But Venmo, PayPal, Amazon, Square, Cash for Business through Cash App, and other third-party payment network providers, like Stripe, are still required to report payments for goods and services to the IRS on Form 1099-K when those payments exceed the previous $20,000/200 transaction threshold. 

Businesses that are required to report your income over $20,000 also include popular sites like Etsy, StubHub, Depop, Poshmark, etc. If you're unsure about whether you will receive a 1099-k, most of these sites have questions and answers on their websites that can help.

Keep in mind, however, that personal transactions (e.g., personal payments to friends and family) on the payment networks including VenmoPayPal, etc., are not considered payments for goods and services. This is because the1099-K third-party payment network reporting rule applies to payments made for goods and services. It doesn't apply to payments made through the payment networks that were gifts, or other personal payments of money to family and friends.

For example, if you received payment through a personal Cash App account during the year, those transactions won’t be reported on a 1099-K. That’s because that personal Cash App account is designed for noncommercial use, like sending a friend money because you’re splitting the cost of a meal. But if you have a Cash for Business account with Cash App (opens in new tab), and your transactions exceed the $20,000 tax reporting threshold for 2022, you will likely receive a 1099-K.

If, for some reason, personal transactions from any of the third-party payment providers get reported on your Form 1099-K, contact the payment network to see if you can get a corrected form. 

If you can’t get a correction, your own records should show personal payments made on the network versus payments for goods and services. Good records can help support the amount of income that you claim on your tax return.

IRS 1099-K Delay: Do You Have to Report a $600 Income?

The IRS is delaying the $600 threshold reporting requirement for the 1099-K for 2022. But normally, any 1099-K Form will go to you and to the IRS. So, the likelihood that the IRS will notice a difference on your federal income tax return between your income reporting, and the reporting on your 1099-K form, (if there are differences) is relatively high.

Also, the IRS requires taxpayers to report all taxable income, so it’s best to report your taxable income and to keep good records that substantiate that income.

If you’re worried about tax liability from your side hustle, consider whether some tax deductions and credits for the self-employed might help reduce your tax bill, and double check other important tax changes for the 2022 tax year.

Kelley R. Taylor
Tax Editor, Kiplinger.com

With more than 20 years' experience as an in-house legal counsel and business journalist, Kelley R. Taylor has contributed to numerous national print and digital magazines on key issues spanning education, law, health, finance, and tax. Kelley particularly enjoys translating complex information in ways that help empower people in their daily lives and work.