global Tax IRS Delays $600 Threshold for 1099-K Reporting December 30, 2022 Attention businesses…the Internal Revenue Service has announced a delay in the reporting threshold change for form 1099-K that was expected to take effect in 2023. Here’s what you should know about the delay. Did you read our blog, Businesses, Are You Ready for 1099-K Reporting in 2023? As a result of a change under the American Rescue Plan, the 1099-K threshold was set to decrease to $600 in 2023, affecting many businesses. The IRS has just announced that this change has been delayed. Here’s what you should know. What is form 1099-K? Form 1099-K is used to report transactions made via payment settlement entities (PSE). If you own a business that accepts payments via credit, debit, and third-party payment networks like Paypal, you are required to report this information on Form 1099-K. Under previous rules, the IRS required each PSE to send your business a Form 1099-K by January 31st if you received over $20,000 in gross payment volume and over 200 separate payments in a calendar year. What was the proposed change? Before the delay, starting in 2023, the threshold was set to decrease to $600, meaning if you receive more than $600 per year (no minimum transaction requirement) through third party peer-to-peer payment apps, you would have been taxed on those transactions. What is the reason for the delay? Due to a number of concerns about the timeline of this change, the IRS and Treasury decided to delay implementation. Their hope is that the additional time will help smooth the transition and give tax professionals and taxpayers time to fully understand the new rules. The delay will also help reduce confusion as we approach the 2023 filing season. The IRS will release Additional details on the delay in the coming months along with additional information to help taxpayers navigate the change. We will keep you posted. What if you have already received a 1099-k? The IRS is working swiftly to provide instructions and clarity for taxpayers who already received a 1099-k as a result of the statutory changes. The IRS also wants to make clear that the existing 1099-K reporting threshold of $20,000 in payments from over 200 transactions remains in effect during the delay. Questions? Contact us.