1099 Login
If you’ve read that PayPal, Venmo, and similar platforms would begin issuing 1099-Ks for payments over $600 in 2026, that’s no longer accurate. The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, reinstated the original thresholds: $20,000 and 200 transactions. (IRS — IR-2025-107) This article covers the rules as they stand today.
What is Form 1099-K?
Form 1099-K reports payments received for goods or services through payment processors. Those processors fall into two categories: payment card processors (credit and debit cards) and third-party settlement organizations (TPSOs) like PayPal, Venmo, and online marketplaces.
One thing that sets the 1099-K apart: the platform issues it, not the business making the payment. That’s different from Form 1099-NEC, which businesses send directly to their contractors. (IRS — Understanding your Form 1099-K)
What are the current 1099-K thresholds?
The threshold depends on how the payment was processed.
For TPSOs (PayPal, Venmo, Cash App, Etsy, eBay, and similar): a 1099-K is required only when total gross payments for goods and services exceed $20,000 AND there are more than 200 transactions in the calendar year. Both conditions must be met.
For payment card processors (credit cards, debit cards, stored-value cards): there is no threshold. A 1099-K is required for any amount processed by card — even $0.01. This rule hasn’t changed. (IRS — Form 1099-K FAQs)
A note on Square and Stripe: These platforms may act as a TPSO for some payments and as a payment card processor for others. Which threshold applies depends on the transaction type.
How the threshold changed over time
| Tax year | TPSO threshold | Payment card threshold | Filed in |
|---|---|---|---|
| Pre-2021 | $20,000 + 200 transactions | No threshold | — |
| 2022 | $20,000 + 200 transactions | No threshold | Early 2023 |
| 2023 | $20,000 + 200 transactions | No threshold | Early 2024 |
| 2024 | $5,000 transitional threshold | No threshold | Early 2025 |
| 2025 onward | $20,000 + 200 transactions | No threshold | Early 2026 |
The American Rescue Plan Act of 2021 lowered the TPSO threshold to $600. The IRS delayed implementation three times — in 2022, 2023, and 2024 — before OBBBA Section 70432 repealed the change, meaning the $600 threshold never fully took effect at the federal level. (IRS — IR-2025-107)
What about Zelle?
Zelle does not issue Form 1099-K and does not report transactions to the IRS — for either personal or small business accounts. As Zelle states directly: the law requiring certain payment networks to file 1099-Ks does not apply to the Zelle Network. (Zelle — Does Zelle report how much money I receive to the IRS?)
That said, this doesn’t affect what you owe. Payments received through Zelle for goods or services are still taxable income. No 1099-K just means no information return was filed but it doesn’t change your tax obligations.
Personal payments vs. business payments
The 1099-K threshold only applies to payments for goods and services, not personal transfers. Money received from friends and family as a gift or expense reimbursement isn’t reportable.
The problem arises when personal and business transactions run through the same account. Platforms report gross payments without distinguishing between the two, so personal transfers in a business account can show up on a 1099-K. This creates extra work at tax time.
The fix: use separate accounts for business and personal, and tag transactions correctly within each platform.
When a 1099-K may arrive below the federal threshold
Three reasons you might get a 1099-K below the federal threshold
Platform discretion. A TPSO can voluntarily issue a 1099-K for amounts below the federal threshold. The federal floor is a minimum requirement, not a ceiling.
State thresholds. Several states have lower reporting thresholds. A 1099-K can be issued at the state level even when you’re below the federal limit.
Backup withholding. If a TPSO withheld taxes during the year because a TIN was missing or didn’t match IRS records, the platform must issue a 1099-K regardless of the payment total.
State-level 1099-K thresholds
Federal thresholds do not bind states. Several states have set their own lower reporting thresholds that remain in effect regardless of the OBBBA change. Businesses operating in these states, or with payees located there, should be aware that TPSO reporting may be required below the federal $20,000 level.
| State | 1099-K threshold | Source |
|---|---|---|
| Massachusetts | $600, no transaction minimum | mass.gov |
| Vermont | $600, no transaction minimum | tax.vermont.gov |
| Virginia | $600 | tax.virginia.gov |
| New Jersey | $1,000, no transaction minimum | NJ Division of Taxation |
Other states may have their own requirements. Check the rules for each state where your business operates or where payees are located.
1099-K vs. 1099-NEC — which applies when?
For businesses that pay contractors through payment apps, the distinction between these two forms matters.
Form 1099-NEC is issued by the payer to report direct payments to independent contractors for services. For payments made in 2026, the federal threshold is $2,000. If a contractor was paid $2,000 or more during the year, a 1099-NEC is required regardless of how the payment was made.
Form 1099-K is issued by the payment platform, not the business. It reports what the platform processed on behalf of the payee across all payers using that platform.
A concrete example: a business pays a contractor $3,000 via PayPal in 2026. The business must issue a 1099-NEC for $3,000. PayPal will issue a 1099-K to that contractor only if their total goods-and-services payments through PayPal — across all payers combined, not just this business — exceed $20,000 and 200 transactions for the year.
Both forms may apply to the same payment. One does not replace the other, and receiving both is expected.
The gross amount on a 1099-K isn’t all taxable
Box 1a on Form 1099-K shows total gross payment transactions — before fees, refunds, returns, shipping costs, or cost of goods sold. Those items can be deducted from the gross amount when you file; they’re not income.
For personal items sold at a loss, the proceeds generally aren’t taxable. For personal items sold at a gain, the gain is taxable. The 1099-K reports what you received but it doesn’t determine the tax treatment.
What to do if your business accepts payments through these platforms
- Keep business and personal accounts separate.
- Tag transactions correctly within the app (goods and services vs. personal).
- Keep records to support deductions from gross amounts: fees, refunds, cost of goods sold.
- Keep your TIN current with each platform; a mismatch can trigger backup withholding and a 1099-K regardless of volume.
- Report all business income even if no 1099-K is issued. Thresholds determine when platforms must file, not what income is taxable.
What businesses paying contractors through these platforms should know
Paying a contractor via PayPal or Venmo doesn’t eliminate your 1099-NEC obligation. If you paid a contractor $2,000 or more in 2026, you still need to issue a 1099-NEC — even if the platform also issued a 1099-K for those same payments.
The two forms report the same payments from different angles. The IRS expects both, and they don’t conflict. Collect a completed W-9 from every contractor before the first payment is made. Payments can reach $2,000 before year-end, and you’ll need the TIN to file.
For more on 1099-NEC requirements under the new $2,000 threshold, see our 1099 reporting thresholds guide.
How Tab Service can help
Form 1099-K is issued by payment platforms once reporting thresholds are met. The 1099-NEC and 1099-MISC obligations — collecting W-9s, verifying TINs, and filing accurately for each contractor paid $2,000 or more — remain with the business.
Tab Service Company has handled 1099 filing for organizations for decades. Our TAB1099 platform manages data validation, TIN verification against IRS records, e-filing through IRIS, and recipient copy delivery. For organizations with large contractor populations, our TIN verification service runs bulk matching before filing season to catch mismatches before they become CP2100 notices.
Sources: IRS — Understanding your Form 1099-K; IRS — Form 1099-K FAQs; IRS — IR-2025-107; IRS — IR-2026-03; Massachusetts DOR; Vermont Department of Taxes; Virginia Tax; Zelle. This article is for informational purposes only and does not constitute tax, legal, or financial advice. Consult a qualified tax professional for guidance specific to your situation.
