IRS delays $600 reporting threshold for third party payments

Date: January 5, 2023

The American Rescue Plan of 2021 lowered the reporting threshold, from greater than 200 transactions, which could aggregate up to $20,000, to a flat rate of $600, regardless of the number of transactions. This change is intended to focus IRS tracking on business transactions.

The IRS has recently released statements that delay the requirement of third-party organizations to report business transactions that exceed the $600 minimum threshold and occurred prior to or during 2022. The year 2022 has been a transition period for the lowered threshold reporting for third-party settlement organizations.

For further reading: https://www.irs.gov/newsroom/irs-announces-delay-for-implementation-of-600-reporting-threshold-for-third-party-payment-platforms-forms-1099-k

Sophie Venter,
Student Outreach Intern