Venmo, PayPal, Zelle must report $600+ in transactions to IRS

AAFCPAs would like to make clients aware that as of 1/1/2022 the IRS has changed the threshold on the reporting requirement for Form 1099-K, Payment Card and Third-Party Network Transactions.

This will specifically affect:

• anyone who receives digital payment for services or goods;
• anyone who accepts payments via credit card or third-party network.

Any individual or business who accepts payment cards or receives digital payments through a third-party network (such as Venmo or PayPal) will receive a 1099-K if the total amount received during the year exceeds $600 ( previously $20,000 ) regardless of the total number of transactions (previously greater than 200 transactions). This would not include any payments for personal gifts, charitable donations or reimbursements. All 2022 payments (if the sum is in excess of $600) will receive a 1099-K by 1/31/2023.

This change may affect how your records are kept and how payments are accepted. This may also cause extra time for recordkeeping for small businesses, particularly businesses where employees earn tips.

If you have any questions, please contact Stacie A. Field, CPA, MBA at 774.512.4103, , sfield@aafcpa.com; or your AAFCPAs Tax Partner.