The $600 threshold faced widespread criticism for being too low, potentially putting millions of lower income workers in the crosshairs of IRS targeting.
In this photo illustration, PayPal's logo is seen displayed on a smartphone screen in front ofThe new rule was originally set to take effect for income received this year, requiring apps like Venmo to send tax documents to those paid at least $600 through the service in 2022.
It would have also required people selling goods on sites like eBay or Etsy to report if they had at least $600 worth of sales.in statements the yearlong delay was made to"reduce confusion" and"provide more time for taxpayers to prepare and understand the new reporting requirements." Several major misconceptions have spread about the reporting requirements, such as that split expenses like rent payments made over Venmo will have to be reported .
Concerns were also raised about how the IRS would handle a flood of Form 1099-K reports—the documents where the payments would have been recorded.The $600 reporting policy was approved last year as part of Democrats' American Rescue Plan. The previous IRS rule only required electronic payment platforms to send 1099-K forms to those receiving at least $20,000 with 200 or more yearly transactions.
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