In years past, the threshold for this was $20,000, but it’s been reduced to $6 and beyond.Ĭongress’ intention in lowering the threshold was to try to find unreported income.
Tucked into the American Rescue Plan Act of 2021 is a provision requiring third-party payment processing services like PayPal, Venmo, and others to issue a form 1099-K (“Payment Card and Third-Party Network Transactions”) to those who receive more than $600 in payments for goods and services through the apps. If you’re in the latter category, and you’ve received payments of more than $600 through one of these services, a new law may apply to you. However, many self-employed people also use it to send and receive payment for business transactions. It’s a convenient way to handle payment transfers, and most use it to transfer money between families and friends.
A lot of people use mobile payment services like Venmo or PayPal these days.
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