AAFCPAs would like to make clients aware, the IRS recently announced a delay of the new 1099-K reporting requirements for calendar year 2022. As a part of The American Rescue Plan Act of 2021 (ARPA), third-party settlement organizations (e.g., PayPal, Venmo,...
AAFCPAs would like to make clients aware, the IRS recently announced a delay of the new 1099-K reporting requirements for calendar year 2022. As a part of The American Rescue Plan Act of 2021 (ARPA), third-party settlement organizations (e.g., PayPal, Venmo, etc.) were required to issue a form 1099-K for those receiving more than $600. This requirement has been postponed until calendar year 2023.
With this delay in place, the old rule remains in effect for 2022, which requires 1099-K forms to be issued when 200 transactions and $20,000 in payments have been processed in a given year.
When the new rule comes into effect in 2023, taxpayers will need to track the purpose of payments received. Payments for reimbursements or small gifts will be treated differently for tax purposes than those for a product or service. In any case, you will receive a 1099-K if the transactions amount to over $600.
If you have questions, please contact Daniel Seaman, CPA at 774.512.4025, dseaman@aafcpa.com; Ernest Carruthers, CPA, MST at 774.512.4122, ecarruthers@aafcpa.com; or your AAFCPAs tax advisor.
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