The updated $600 Form 1099-K reporting level for third-party settlement organizations will not go into effect until 2023, according to an announcement made by the Internal Revenue Service (IRS). Payment processors, tax experts, and taxpayers all provided input that led to this conclusion. It is to lessen confusion. Only if a taxpayer obtains more than $20,000 and finishes over 200 transactions will reporting be required in 2023.
The new provision’s complications and the effect it will have on numerous taxpayers are the reasons for the delay. Stakeholders require time to adapt as well. As part of the phase-in of the $600 reporting barrier under the American Rescue Plan (ARP), the IRS intends to impose a $5,000 threshold in 2024.