Reference · Form 1099-K

Form 1099-K in 2026: the $20,000-and-200 test, and the end of the $600 rule

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This is education, not tax advice. I'm not a CPA or EA. State taxes are not covered.

Every document behind this page is final — the two statutes, the IRS notices, and the fact sheet that prints the operative rule. Nothing here rests on a draft form. If the threshold rule changes, this page is updated in place with a dated note at the foot of the page.

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Subject
Form 1099-K reporting threshold
Core line
Schedule C, line 1
Changes
Update log (1)

The $600 Form 1099-K rule is over — and, in law, it never took effect. For calendar 2026 payments, a third-party settlement organization files Form 1099-K for a payee only when the gross amount of reportable payments exceeds $20,000 and the number of transactions exceeds 200. The $600 figure still quoted in forums and older articles was the American Rescue Plan's test: delayed by transition notices, replaced on paper before it ever governed a filing season, repealed retroactively in 2025, and formally closed in September 2026. This page is that whole sequence, dated, with the document that makes each step so. It ends where every threshold page on this site ends: a reporting threshold is not a taxability line.

The test as it stands

Two tests sit inside Form 1099-K, and they are not the same test. The first is the third-party settlement organization test — the marketplace and platform test. Read both halves: the gross amount of reportable payment transactions to a payee must exceed $20,000, and the number of those transactions must exceed 200. Exceeds, on both sides — exactly $20,000, or exactly 200 transactions, does not cross it. Fact Sheet 2025-08 prints this as the operative rule for calendar 2025 and calendar 2026 reporting, and the Instructions for Form 1099-K print the same test at Box 1a as the de minimis exception.

Payment cards: a different rule, with no threshold

Payment-card transactions — a processor settling a merchant's card sales — are not measured against the $20,000-and-200 test at all. There is no threshold: the fact sheet's reminder is that a Form 1099-K can arrive for card payments of any size, down to a single cent. A 1099-K that arrives for card receipts says nothing about the platform test above. The two categories share a form; they do not share a test, and this page does not merge them.

How it got here

The dated sequence, from the statute and the notices themselves. Every $600 in it is the repealed ARPA-era amount, in its own year.

March 11, 2021
The American Rescue Plan Act (P.L. 117-2, §9674) lowers the third-party settlement organization test to exceeds $600, with no transaction minimum, for returns for calendar years beginning after December 31, 2021 — first, calendar 2022. This is the figure that entered the forums and the headlines. It is also the figure that never governed a filing season: every year it was set to reach was first turned into a transition year, below.
December 23, 2022
Notice 2023-10 declares calendar 2022 a transition period: for years before 2023 there is no reporting — and no §§6721/6722 penalties — unless the old test, over $20,000 and over 200, is met. One exception is printed: a payer that performed backup withholding in 2022 still files if payments plus withholding exceeded $600.
November 21, 2023
Notice 2023-74 declares calendar 2023 an additional transition year under the old test, and the IRS states it is planning a threshold of $5,000 for tax year 2024 as a phase-in toward the $600 amount.
November 26, 2024
Notice 2024-85 fixes the phase-in: calendar 2024 — over $5,000, regardless of transaction count; calendar 2025 — over $2,500; calendar 2026 and after — the statutory $600, with penalty relief keyed to those amounts.
July 4, 2025
The One Big Beautiful Bill Act (P.L. 119-21, §70432) repeals the ARPA revision outright. Section 6050W(e) is restored to the pre-ARPA test, effective as if included in the American Rescue Plan itself — so in law the $600 test, and the $5,000 / $2,500 phase-in built on it, never took effect. The restored test applies to calendar years beginning after December 31, 2024.
October 23, 2025
The IRS confirms the operative rule in Fact Sheet 2025-08 (IR-2025-107): a settlement organization is not required to file unless gross reportable payments exceed $20,000 and the number of transactions exceeds 200 — and payment cards still carry no threshold.
September 29, 2026
Notice 2026-58 formally obsoletes the three transition notices — 2023-10, 2023-74, and 2024-85. The $600 saga is closed on paper: nothing in it remains in force to phase in.

The sentence under all of it

A reporting threshold is not a taxability line. The IRS prints the same point on its Form 1099-K pages: the thresholds decide whether a form is filed, not whether income is taxable — and income is reported whether or not a form arrives, including income paid in cash, property, goods, or digital assets. Income is taxable from the first dollar. A seller, creator, or freelancer whose platform sends no form because the $20,000-and-200 test was not crossed reports the same income, on the same line, from their own records. Article 3 reads that rule where no form of any kind arrives; Article 14 reads it for the missing 1099-K specifically.

When a form does arrive

When the test is crossed and a Form 1099-K arrives, its number has a home. Box 1a is the gross amount of reportable payment transactions — figured without regard to fees, refunded amounts, shipping amounts, credits, discounts, or any other amounts — and for a sole proprietor it enters the return whole, at Schedule C, line 1. The pieces that are not supposed to stay inside the gross figure are placed by the return's own lines, not netted off the form: refunds on line 2, platform fees on line 10. Article 14 walks that gross figure to line 1 for a marketplace seller; Article 7 reads the same box for a solo creator.

And a form can arrive for sales that were never a business at all. Personal items and hobby sales sort before line 1, not after it: a personal item sold at a gain is figured on Form 8949 and Schedule D; a personal item sold at a loss produces no deductible loss; hobby income is not reported on Schedule C — it lands on Schedule 1, line 8j. Article 16 reads that triage — business, personal items, or hobby — in full.

What this page is not

This page closes a threshold question; it does not file anyone's return. It gives no filing advice and no instructions for a form already received — the articles linked above read the lines those questions land on. It also stops at the federal fence: state Form 1099-K thresholds are state law, outside this site's fence, and state taxes are not covered here.

Sources

9 claims

Every claim above traces to a document, a tax year, a line, and the date it was checked.

  1. 1
    A third-party settlement organization files Form 1099-K only if gross reportable payments to a payee exceed $20,000 AND the number of transactions exceeds 200 — the operative rule for calendar 2025 and 2026 reporting
    DOC
    Fact Sheet 2025-08 · IR-2025-107 · Instructions for Form 1099-K
    YEAR
    2025 · 12/2026 instructions
    LINE
    §6050W(e) test · Box 1a, de minimis exception
    CHECKED
    2026-10-08
  2. 2
    Payment-card transactions have no threshold — a Form 1099-K can arrive for card payments of any amount
    DOC
    Fact Sheet 2025-08 · IR-2025-107
    YEAR
    2025
    LINE
    Payment-card discussion
    CHECKED
    2026-10-08
  3. 3
    The American Rescue Plan lowered the settlement-organization test to exceeds $600 with no transaction minimum, for calendar years after 2021
    DOC
    American Rescue Plan Act, P.L. 117-2, §9674
    YEAR
    2021
    LINE
    §6050W(e), as amended 2021
    CHECKED
    2026-10-08
  4. 4
    Calendar 2022 and 2023 were declared transition years under the old test; a $5,000 / $2,500 phase-in was then set for calendar 2024 and 2025
    DOC
    Notices 2023-10 · 2023-74 · 2024-85
    YEAR
    2022–2024
    LINE
    Transition rules
    CHECKED
    2026-10-08
  5. 5
    The ARPA revision was repealed and the pre-ARPA test restored, effective as if included in the American Rescue Plan — in law, the $600 test never took effect
    DOC
    One Big Beautiful Bill Act, P.L. 119-21, §70432
    YEAR
    2025
    LINE
    §6050W(e), restored
    CHECKED
    2026-10-08
  6. 6
    The three transition notices are formally obsolete
    DOC
    Notice 2026-58
    YEAR
    2026
    LINE
    Obsolescence list, items 1–3
    CHECKED
    2026-10-08
  7. 7
    Reporting thresholds do not affect whether income is taxable; income is reported whether or not a form arrives — cash, property, goods, or digital assets included
    DOC
    Fact Sheet 2025-08 · IRS “Understanding your Form 1099-K” · “What to do with Form 1099-K”
    YEAR
    2025 · current pages
    LINE
    Threshold discussion · “Report Form 1099-K payments and other income”
    CHECKED
    2026-10-08
  8. 8
    Box 1a is the gross amount of reportable payment transactions, without regard to fees, refunded amounts, shipping amounts, credits, discounts, or any other amounts
    DOC
    Instructions for Form 1099-K
    YEAR
    12/2026
    LINE
    “Box 1a. Gross Payment Card/Third Party Network Transactions”
    CHECKED
    2026-10-08
  9. 9
    A sole proprietor's business 1099-K income enters at Schedule C, line 1; hobby income lands on Schedule 1, line 8j; a personal item sold at a gain is figured on Form 8949 and Schedule D, and at a loss produces no deductible loss
    DOC
    IRS “What to do with Form 1099-K” · Instructions for Schedule C
    YEAR
    Current page · 2025 instructions
    LINE
    “Here's where to report…” · General Instructions
    CHECKED
    2026-10-08

Update log

Changes are dated and kept. Old figures are never silently overwritten.

2026-10-09:
Page published. The threshold sequence is stated from the statutes and IRS notices named in the source chips — all final documents; no draft form stands behind any figure on this page. If the IRS posts updated Form 1099-K guidance for the filing season, the operative-rule rows are re-read against it.