Millions of people who sell goods or earn side income through platforms like Venmo, PayPal, and Etsy will no longer receive a Form 1099-K unless their activity crosses a much higher bar. The One, Big, Beautiful Bill Act, signed into law on July 4, 2025, retroactively restored the pre-2021 reporting threshold so that third-party settlement organizations must file the form only when a user’s gross payments exceed $20,000 and the total number of transactions exceeds 200. The change erases a contested $600 trigger that had been delayed repeatedly and never fully took effect.
How the $20,000 threshold reversal affects payment app users
The practical effect is straightforward: casual sellers on platforms like eBay, freelancers paid through apps, and small-scale resellers will stop getting tax forms for activity that falls below the dual threshold. Under the American Rescue Plan Act of 2021, Congress had amended Internal Revenue Code Section 6050W to require reporting at just $600 with no transaction-count floor. The IRS delayed that lower limit for three consecutive filing seasons, issuing transitional guidance each year while the agency and affected platforms struggled with implementation.
Section 70432 of Public Law 119-21 ended the uncertainty by repealing the revised de minimis rules entirely and reverting to the original dual test. The Congressional Research Service confirmed the repeal in its summary of the reconciliation law’s tax provisions, noting changes to both IRC Sections 3406 and 6050W. Because the reversion is retroactive, it applies not just going forward but also covers any tax years that fell within the delayed rollout period.
Whether this change will cut the volume of 1099-K forms by two-thirds or more in the first full tax year is a reasonable expectation but not yet measurable. The IRS has not published aggregate filing counts broken out by the old versus new threshold, so the exact reduction will only become clear when the agency releases its annual data book covering calendar year 2025 or 2026 filings. The direction of the shift, though, is not in doubt: fewer forms will be generated because the qualifying bar is dramatically higher.
IRS guidance and the statutory record behind the reversion
The IRS spelled out the restored rules in news release IR-2025-107, stating that third-party settlement organizations “generally are not required” to file 1099-Ks unless both the $20,000 gross-payment test and the 200-transaction test are met. The agency also published Fact Sheet FS-2025-08 with detailed FAQs. Updated instructions for Form 1099-K now reflect the higher threshold as the current standard.
A separate proposed rule from Treasury and the IRS, published in the Federal Register in January 2026, traces the full statutory path: the pre-ARPA threshold of $20,000 and 200 transactions, the ARPA reduction to $600, and the restoration under Public Law 119-21. That rulemaking addresses backup withholding procedures for third-party network transactions and confirms the reporting threshold applies specifically to payments processed through payment card and third-party network channels.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
