The biggest change for 1099-K reporting in 2024 is the phased-in implementation of a lower reporting threshold, but it’s important to note that the original, much lower threshold was actually delayed for 2023. Here are the details:
Original Change (Delayed):
- The American Rescue Plan Act of 2021 initially lowered the reporting threshold from $20,000 and 200 transactions to $600 for payments received through third-party network transactions (like Etsy, PayPal, etc.).
- This change was delayed for 2023 due to concerns about taxpayer confusion and administrative burdens.
Phased-in Implementation:
- Instead of the $600 threshold, the IRS is implementing a phased-in approach for 2024:
- 2024: The reporting threshold will be $5,000 for payments received through third-party network transactions.
- Future years: The IRS plans to further decrease the threshold in subsequent years, but the exact timing and amounts are still under consideration.
Other Changes:
- The IRS is also inviting feedback on the $5,000 threshold and other aspects of the reporting requirement, including how to focus reporting on taxable transactions.
Keep in mind that the taxability of income earned through third-party networks remains the same regardless of the reporting threshold.
Here are some resources for more information:
- IRS announcement about the delay and phased-in approach: https://www.irs.gov/newsroom/what-taxpayers-should-do-when-they-receive-form-1099-k
- IRS page on Form 1099-K: https://www.irs.gov/pub/irs-pdf/f1099k.pdf
- Tax Foundation article on the changes: https://www.taxact.com/tax-information/why-did-i-get-a-1099-k
I hope this helps! Contact us if you have any other questions.
Blaine La/Car Associates 
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