Short answer
Payment apps and online marketplaces (third party settlement organizations) have to send you a Form 1099-K only when the payments for goods or services you receive through them total more than $20,000 and the number of transactions is more than 200. Both tests must be met. The One, Big, Beautiful Bill restored this threshold retroactively. It doesn't apply to card payments from a processor, which are reported with no minimum, and it doesn't change what is taxable: you report all business income whether or not you get a 1099-K.
Form 1099-K reports payments you received through a payment card company, a payment app or an online marketplace. For several years the threshold was a moving target, with lower amounts announced and then delayed. The One, Big, Beautiful Bill settled it by restoring the rule that applied before 2021.
This guide uses the IRS pages on Form 1099-K linked at the end.
What is the Form 1099-K threshold for 2026?
| How you were paid | When you get a Form 1099-K |
|---|---|
| Through a payment app or online marketplace (a third party settlement organization) | When payments for goods or services total more than $20,000 and there are more than 200 transactions |
| By credit, debit or gift card, through your card processor | No minimum. The processor reports them however many payments or however much they were |
The IRS says the One, Big, Beautiful Bill "retroactively reinstated the reporting threshold in effect prior to the passage of the American Rescue Plan Act of 2021." So the lower thresholds that were announced in recent years no longer apply.
The test needs both parts. A seller with $30,000 of sales in 150 transactions doesn't meet the app threshold, and neither does one with 500 transactions totaling $15,000. A platform may still send a 1099-K below the threshold; the IRS notes you may receive one anyway.
What the threshold doesn't change
The threshold only decides when a platform has to send the form. It doesn't change what is taxable. The IRS is clear: whether or not you receive a Form 1099-K, you must still report any income on your tax return.
For a business, that means every sale paid through an app or marketplace belongs in your books and on your return, at any amount. Good bookkeeping records it as it comes in, so a 1099-K, or the lack of one, makes no difference to your numbers.
Personal payments don't belong on a 1099-K
Money from friends and family as a gift, or to pay you back for a shared personal expense, isn't a payment for goods or services and shouldn't be reported on a Form 1099-K. The IRS gives examples such as splitting the cost of a meal or a roommate paying you their share of the rent.
Many payment apps let the sender mark a payment as personal or as a purchase. If you use the same app for both, keep business payments in a separate business account. It keeps the 1099-K clean and your records simpler.
What to do when you get a Form 1099-K
- Compare it with your records. The 1099-K shows the gross amount. Match it to your sales records and the deposits in your bank account. Our bank reconciliation guide shows how to tie deposits out.
- Account for fees and refunds. The gross amount can include amounts you never kept, such as platform fees and refunds to customers. The IRS says these can be deducted from the gross amount, as long as your records support them.
- Report the business income. Sole proprietors and single-member LLC owners usually report it on Schedule C with their other gross receipts.
- Fix an incorrect form with the issuer. If the form is wrong, contact the company listed as the "Filer" in the top left corner and ask for a corrected form. The IRS says not to contact it, because it can't correct a Form 1099-K. If you can't get a correction in time, don't delay your return.
Selling personal items
If you sold something personal, such as used furniture or clothes, the rules differ:
- Sold at a gain: the profit (sale price minus what you paid) is taxable and is reported on Form 8949 and Schedule D.
- Sold at a loss: the loss isn't deductible, but the IRS explains how to report the 1099-K amount so it isn't taxed as income, on Schedule 1 or on Form 8949.
State rules can differ
The $20,000 and 200 transaction test is the federal rule. State reporting rules can be different from it. If a form arrives below the federal threshold, check with your state's revenue department.
How Top Accounting Firm can help
Online sellers and service businesses paid through apps often have income spread across several platforms. Our bookkeeping team brings it together each month, and our tax preparation team reports it correctly, with or without a 1099-K. Selling across states? Our sales tax service covers the other half of the picture. Book a free consultation.
Frequently asked questions
What is the 1099-K threshold for 2026?
Did the $600 1099-K threshold go away?
Do I have to report income if I don't get a 1099-K?
Are payments from friends and family reported on a 1099-K?
My 1099-K is wrong. What do I do?
Do platform fees count as income on a 1099-K?
Sources
- IRS: Understanding your Form 1099-K
- IRS: What to do with Form 1099-K
- IRS: IR-2025-107, FAQs on Form 1099-K threshold under the One, Big, Beautiful Bill
- IRS: Form 1099-K FAQs
Checked against these sources on October 26, 2026. This article is general information, not tax or legal advice. Rules, fees and deadlines change, so confirm with the official source or a tax professional before you file.
