What it means: The IRS threshold reporting requirements for 2024 are set at $5,000 but will be drastically lower in 2025 and 2026. This will impact any small business that uses online platforms such as eBay, PayPal, Etsy, Venmo, and CashApp.

Our take: “While this IRS announcement sets the threshold for 2024 and prevents many Americans and small businesses from being inundated with new Form 1099-K reporting requirements, it doesn’t stop the main problem of the upcoming onerous $600 requirement,” said Vice President of Federal Government Relations Jeff Brabant.

Take Action: This phased approach doesn’t address the looming $600 threshold, but Congress can restore the original threshold of $20,000 and 200 transactions. Tell Congress to reduce costly and unnecessary government regulations on small business owners. 

TAKE ACTION

The IRS announced an updated threshold reporting requirement for 2024, which will impact small businesses that use online platforms for selling such as eBay, PayPal, Etsy, Venmo, and CashApp. The IRS still has plans to lower the threshold requirements in the next two years.

The IRS will set the threshold requirements for Form 1099-K reporting for annual transactions in 2024 at $5,000 but still plan to mandate the $2,500 threshold in 2025 and the burdensome $600 threshold in 2026 for online platforms. This remains a problem for small businesses unless Congress repeals the requirement before the new threshold takes effect next year.

“This requirement would make anyone who uses an online platform to send more than $600 to another person, even for rent, groceries, or concert tickets, to register the transactions immediately with the IRS,” explained Brabant. “NFIB urges Congress to provide relief for Main Street by immediately repealing this burdensome requirement.”

TAKE ACTION: Tell Congress to restore the original threshold of $20,000 and 200 transactions as well as reduce costly and unnecessary government regulations on small business owners.