Form 1099-K Rules Changed Under OBBBA

​The One Big Beautiful Bill Act (OBBBA) eliminated the federal $600 reporting threshold for Form 1099-K. Starting with calendar year 2025 transactions, payment platforms issue a federal Form 1099-K only when higher, pre-existing thresholds are met. As a result, fewer taxpayers will receive a 1099-K.

If you accept payments for goods or services through third-party payment platforms such as PayPal, Stripe, Square, Etsy, Venmo, Cash App, Apple Pay, Google Pay, or similar services, federal Form 1099-K reporting rules may apply.

Zelle operates differently. Because it functions primarily as a bank-to-bank transfer service, it generally does not issue Form 1099-Ks. However, income received through Zelle for goods or services is still taxable and must be reported, even if no tax
form is issued.

Personal transfers, such as friends and family payments, are not taxable. Payments for goods or services may be reportable, and income remains taxable whether-or-not a form is issued.

This page explains the new federal thresholds, what the form reports, how personal and business payments are treated, and why proper tracking still matters for 2025 and beyond.

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Federal 1099-K Reporting Thresholds for 2025 and Beyond

​Under OBBBA, a payment platform issues a federal Form 1099-K only when both of the
following conditions are met during a calendar year:

 

• More than $20,000 in gross payments received.

• More than 200 transactions processed.

Planned lower federal thresholds have been eliminated. If either condition is not met, a federal 1099-K is not issued.

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What Changed and What Did Not?

​What changed?

• Fewer taxpayers will receive a federal Form 1099-K.

• The $600 reporting rule no longer applies at the federal level.

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What did not change?

• Income remains taxable whether-or-not a form is issued.

• Taxpayers are still required to report business and self-employment income accurately.

• Recordkeeping remains the taxpayer’s responsibility.

The absence of a form does not eliminate reporting obligations.

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What a Form 1099-K Actually Reports?

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A Form 1099-K reports gross payments processed through a platform. Gross payments do not equal taxable income.
Reported amounts may include:

 

• Platform processing fees.

• Refunds and chargebacks.

• Shipping charges.

• Sales tax collected and remitted.

• Other non-income amounts.

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Because the form reports gross activity, proper expenses and adjustment tracking is essential to avoid overstating income.

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Personal Versus Business Payments

Not all digital payments are treated the same.

Personal payments:

• Friends and family reimbursements are not taxable.

• Personal transfers are not business income.

Business payments:

• Payments for goods or services are taxable business income.

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Important State Level Considerations

OBBBA applies to federal reporting only. Some states maintain lower thresholds or
different reporting rules.

It is possible to:

 

• Not receive a federal 1099-K.

• Still receive a state level form.

• Still have state reporting obligations.

 

State compliance should be reviewed separately from federal rules.

Example: Etsy Seller in 2025

 

Facts:

• 140 transactions during the year.

• $12,000 collected through the platform.

 

Result:

• No federal Form 1099-K issued.

• Income remains taxable.

• Reported on Schedule C with appropriate expenses.

 

The reporting form changed. The tax reporting obligation did not.

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​Why Digital Payment Planning Matters?

The new rules reduce confusion around federal reporting but increase the importance of accurate internal records.

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Proactive planning helps:

• Prevent income overstatement.

• Support proper Schedule C reporting.

• Avoid surprises at filing time.

• Address state specific requirements early.

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A missing Form 1099-K does not mean income is not reportable. Accurate tracking throughout the year is essential.

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Recommended Actions for 2025
To prepare for filing under the new 1099-K rules:

 

• Confirm how each payment platform categorizes transactions.

• Separate personal and business payment activity.

• Track gross receipts and deductible expenses throughout the year.

• Retain platform statements and transaction summaries.

• Review state specific reporting rules.

Clean tracking now prevents problems later.

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Request a 1099-K and Digital Payment Review

A digital payment review evaluates how your platforms report activity and how that information flows into your tax return.
A review includes:

 

• Analysis of payment platform activity.

• Review of gross receipts versus taxable income.

• Schedule C reporting guidance.

• State reporting considerations.

• Recordkeeping recommendations for 2025 and beyond.

Submit the form below to review how your digital payments will be reported for 2025.

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​Frequently Asked Questions About Form 1099-K Under OBBBA

 

Is the $600 federal reporting rule still in effect?
No. OBBBA eliminated the $600 federal reporting threshold for Form 1099-K.
 

If I do not receive a 1099-K, do I still report the income?
Yes. All taxable income must be reported whether-or-not a form is issued.
 

Does a 1099-K show profit?
No. It reports gross payments, not net income.
 

Are personal reimbursements taxable?
No. Personal payments are not taxable income.
 

Do state rules follow the federal thresholds?
Not always. Some states apply different reporting standards.
 

Should I change how I track digital payments in 2025?
Yes. Accurate categorization and recordkeeping are more important under the new rules.

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Review My 1099-K and Digital Payments

​Federal 1099-K rules changed again for 2025. A digital payment review helps confirm reporting accuracy, separates gross activity from taxable income, and identifies state level considerations.
This review is designed for small business owners, self-employed individuals, online sellers, and side income earners who accept digital payments.

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Provide information about your payment platforms, business activity, and income type. This review identifies reporting requirements, documentation needs, and planning opportunities for 2025.
Early review reduces filing risk and improves accuracy.