How Form 1099-K Thresholds Work for Tax Year 2026

Who files a Form 1099-K

Form 1099-K is filed by a payment settlement entity (PSE), the company that sends the instruction to move money into a seller’s account. The IRS names two kinds: a merchant acquiring entity, the bank or similar organization that pays sellers for card transactions, and a third party settlement organization (TPSO), the central organization that pays sellers on a payment network.¹

In plain terms, the IRS describes the senders as payment card companies on one side, and payment apps and online marketplaces on the other; its list of marketplaces includes freelance marketplaces, craft and maker marketplaces and crowdfunding platforms.⁴ When a PSE hires an electronic payment facilitator to make the payouts, the facilitator files instead.¹

Card payments: no minimum

For payment card transactions (credit, debit and gift cards accepted across a network) there is no threshold at all. In the IRS’s own example, $0.01 received by card is enough for a Form 1099-K.³ The IRS calls this card rule unchanged; the thresholds below apply only to TPSOs.³

Payment apps and marketplaces: both tests

A TPSO must report a seller only when, for the calendar year, the gross amount of reportable payments exceeds $20,000 and the number of those transactions exceeds 200.¹ Both conditions have to be met: $25,000 across 150 sales, or $15,000 across 400, stays under the federal requirement.¹

That’s the floor for the requirement, not a ceiling on the form. The IRS says a TPSO may still send a Form 1099-K below those amounts, and that a TPSO which performed backup withholding for a payee must file one regardless.³ Payments between friends and family for gifts or shared costs aren’t payments for goods or services and aren’t reportable on the form.⁴

How the threshold moved, 2022 to 2026

The American Rescue Plan Act of 2021 lowered the TPSO threshold to over $600, with no transaction count, for calendar years after 2021.⁷ The IRS then delayed it three times. Notice 2023-10 pushed it past 2022, and Notice 2023-74 treated 2023 as a further transition year at the old $20,000 and 200 level.⁶⁷

Notice 2024-85 set a phase-in instead: over $5,000 for 2024, over $2,500 for 2025, and over $600 from 2026 on.⁷ None of those lower figures survives in current law. The One, Big, Beautiful Bill retroactively reinstated the pre-ARPA threshold of over $20,000 and over 200 transactions, which the IRS announced in news release IR-2025-107 on October 23, 2025, alongside updated FAQs.²⁵ The Instructions for Form 1099-K revised in December 2026 state the same test.¹

What the form reports

Box 1a holds the gross amount for the year: the total of reportable transactions with no adjustment for fees, refunds, discounts, shipping or credits. Box 1b repeats that for card-not-present sales such as online orders, Box 3 counts the transactions, and boxes 5a to 5l split the gross amount by month.¹

The current instructions add Box 1c for cash tips, required by section 70201 of P.L. 119-21, and Box 1d for the Treasury tipped occupation code.¹ The IRS notes that fees, refunds and the other items left out of the gross amount aren’t income.³⁸

When it arrives

The filer must furnish the payee’s copy by January 31 of the year after the transactions, on paper or electronically with the payee’s consent.³ The IRS copy is due by February 28 on paper or March 31 if filed electronically.³ Any filer with 10 or more information returns in a year must file them electronically, through the IRS’s IRIS or FIRE systems.³ For tax year 2026, those dates fall in early 2027.

State thresholds can be lower

The federal test isn’t the only one. The IRS says a state may have a lower reporting threshold for TPSOs, which could produce a Form 1099-K even when the federal amounts weren’t reached.³ The form carries state boxes (6 to 8) for filers that report to a state tax department.¹ Each state’s own rule is published by that state.

A form doesn’t decide what’s income

The IRS is explicit that the reporting threshold doesn’t change whether payments are taxable or whether a return has to be filed: income is taxable unless the law says otherwise, with or without a Form 1099-K.³ The reverse holds too: a payment that appears on a Form 1099-K isn’t automatically taxable, for example a personal item sold at a loss.³

What happens next is set out in the IRS’s official procedure, What to do with Form 1099-K, which covers checking the form, correcting a wrong one and where the amounts go on a return.⁸ The full filing rules are in the Instructions for Form 1099-K.¹