Form 1099-K threshold is $5,000 for calendar year 2024 and $2500 for calendar year 2025
The IRS today released providing a revised timeline for implementing changes to the reporting requirements for third-party settlement organizations (TPSOs) under section 6050W(e), as amended by the 鈥淎merican Rescue Plan Act of 2021.鈥� The notice establishes calendar years 2024 and 2025 as the final transition period for TPSOs (which can include e-commerce platforms) to comply with the new reporting thresholds.
The notice provides that TPSOs will be required to report transactions on Form 1099-K when the gross amount of aggregate payments for those transactions is more than:
Additionally, the IRS will not assert penalties under sections 6651 (late filing and late payment of tax) or 6656 (late deposit of tax) for a TPSO鈥檚 failure to withhold and pay backup withholding tax for calendar year 2024 transactions but will assert such penalties starting in 2025.
TPSOs that have performed backup withholding for a payee during calendar year 2024 must file a Form 945 and a Form 1099-K with the IRS and furnish a copy to the payee.聽
The transitional relief provided by Notice 2024-85 is limited to payments made in settlement of third-party network transactions and does not apply to payment card transactions that are also reportable on Form 1099-K.