You may recall from a previous blog post of ours that in 2022, the IRS would require that e-commerce platforms such as Venmo, CashApp, PayPal, and Etsy to report all earnings of $600 or more on “business transactions” – payments for the sale of goods or services (vs. personal transactions for which the law did not intend to track) to the IRS. However, the IRS has recently announced that it will not require these platforms send a Form 1099-K in 2023 for 2022 earnings.
Acting Commissioner Doug O’Donnell has said that the delay in implementation of this Form 1099-K requirement is being done “to help smooth the transition and ensure clarity for taxpayers, tax professionals, and industry.” O’Donnell also stated that “the additional time will help reduce confusion during the upcoming 2023 tax filing season and provide more time for taxpayers to prepare and understand the new reporting requirements.”
The prior rule will remain – these platforms will continue to be required to issue a Form 1099-K to those that earn $20,000 or more from over 200 transactions.
The postponement has deferred this rule change to January of 2024 when 2023 income statements are required to be issued.