• FREE RESOURCES
        • Accounts Payable
          Finally! The trick to securing greater T&E compliance
          Benefits
          Rooting out folks who don’t belong on your health plan: A 6-point dependent audit checklist
          IT
          3 costly misconceptions about biz email compromise
          Credit and Collections
          Collecting via email: 4 must-make moves in your subject line
          Accounts Payable
          5 Tough-to-spot signs that an invoice is fake
  • PREMIUM CONTENT
        • Staff management
          120 Proven Communications Tips for Today’s CFO
        • Payroll
          Handling Nonexempt Employee Pay: Stay Compliant and Avoid DOL Audits
          Accounts Payable
          T&E Best Practices: Complete Guide to Ensure Compliance
          Payroll
          Payroll Best Practices: 4 Ways to Save Time and Money
        • Staff management
          Email Best Practices: A 6-Question Quiz
          Staff management
          Innovative Communications Strategies: An Email Case Study
          Staff management
          A 5-part Framework for Successful Workplace Communications
        • SEE MORE
          PREMIUM RESOURCES
  • CORONAVIRUS RESOURCES
  • LOG IN
  • SIGN UP FOR FREE

Resourceful Finance Pro

  • FREE RESOURCES
        • Accounts Payable
          Finally! The trick to securing greater T&E compliance
          Benefits
          Rooting out folks who don’t belong on your health plan: A 6-point dependent audit checklist
          IT
          3 costly misconceptions about biz email compromise
          Credit and Collections
          Collecting via email: 4 must-make moves in your subject line
          Accounts Payable
          5 Tough-to-spot signs that an invoice is fake
  • PREMIUM CONTENT
        • Staff management
          120 Proven Communications Tips for Today’s CFO
        • Payroll
          Handling Nonexempt Employee Pay: Stay Compliant and Avoid DOL Audits
          Accounts Payable
          T&E Best Practices: Complete Guide to Ensure Compliance
          Payroll
          Payroll Best Practices: 4 Ways to Save Time and Money
        • Staff management
          Email Best Practices: A 6-Question Quiz
          Staff management
          Innovative Communications Strategies: An Email Case Study
          Staff management
          A 5-part Framework for Successful Workplace Communications
        • SEE MORE
          PREMIUM RESOURCES
  • CORONAVIRUS RESOURCES
  • Accounts Payable
  • Credit and Collections
  • Payroll
  • Accounting
  • Benefits
  • Finance Technology
  • Sales & Use Tax
  • More
    • Employment Law
    • Strategy
    • Policy and Culture
    • Fraud
    • Budgeting and Forecasting
    • Banking
    • Staff Management
    • Cost Control
  • Accounting
  • Accounts Payable
2 minute read

Good news for your app-paid vendors: Form 1099-K reporting changes delayed 1 year by IRS

Brian Bingaman
by Brian Bingaman
January 4, 2023
  • SHARE ON

A lot more contractors and businesses like yours that receive payments via CashApp, PayPal or Venmo have been bracing for getting a 2022 Form 1099-K for income received from business transactions over third-party payment networks.

That’s because the Form 1099-K reporting threshold requirement for third-party settlement organizations was lowered from $20,000 in aggregate payments from over 200 transactions to $600 regardless of the number of transactions, potentially opening the floodgates on the volume of forms issued.

But now payees – especially gig workers – are breathing a sigh of relief. Originally set to take effect this tax filing season, IRS has delayed the timeline for the lowering of the threshold to January 1, 2024 “to help smooth the transition and ensure clarity for taxpayers, tax professionals and industry.”

In a statement, acting IRS commissioner Doug O’Donnell said, “The IRS and Treasury heard a number of concerns regarding the timeline of implementation of these changes under the American Rescue Plan Act. The additional time will help reduce confusion during the upcoming 2023 tax filing season and provide more time for taxpayers to prepare and understand the new reporting requirements.”

Third-party settlement organizations won’t be required to report tax year 2022 transactions on Form 1099-K to the IRS or the payee unless they meet the $20,000/200 transactions. Meanwhile, the transition’s described in more detail in IRS Notice 2023-10.

AICPA called on Congress to take cost-of-living levels into consideration and revisit previous recommendations that were made to raise the threshold from $600 to a higher amount.

Vendors may get Form 1099-K by mistake

There’s a chance your Finance team may field a call from a vendor looking to verify payment amounts from your company because they’re looking at a Form 1099-K and trying to separate business payments from personal payments on a third-party app that were erroneously reported as income.

They’ll need a gentle reminder that with the new threshold, it’s going to be important for them to keep separate personal and business accounts for the payment apps they use. Let them know that if they received a 1099-K for money that was sent from a family member or friend, they should reach out to the payment processing company to get that corrected.

IRS is working on updated instructions for taxpayers who may have already received a 1099-K.

State requirements?

Your vendors also need to be aware that the 1099-K reprieve only applies to federal taxes. They may have 1099-K obligations with their states because of certain reporting thresholds.

For example, Maryland, Massachusetts, Vermont, Virginia and Washington DC have the $600 threshold, New Jersey has a $1,000 threshold and in Arkansas it’s $2,500.

Brian Bingaman
Brian Bingaman
Brian researches and writes about accounts payable and CFO management trends. He was a newspaper journalist in suburban Philadelphia for nearly 20 years.

Get the

Resourceful Finance Pro Logo

Newsletter

With Resourceful Finance Pro arriving in your inbox, you will never miss critical stories on accounting, benefits, payroll & employment law strategies.

  • Hidden
  • Hidden
  • Hidden
  • Hidden
  • Hidden
  • Hidden
  • Hidden
  • Hidden
  • Hidden
  • Hidden
  • Hidden
  • Hidden
  • Hidden
  • Hidden
  • This field is for validation purposes and should be left unchanged.
Resourceful Finance Pro Logo
  • ABOUT
  • CONTACT
  • WRITE FOR US
  • ADVERTISE WITH US
  • Accounting
  • Benefits
  • Payroll
  • Policy and Culture
  • Employment Law
  • Fraud
  • Finance Technology
  • Sales & Use Tax
  • Accounts Payable
  • Credit and Collections
  • Strategy
  • Budgeting and Forecasting
  • Banking
  • Staff Management
  • Cost Control

Resourceful Finance Pro, part of the SuccessFuel Network, provides the latest Finance and employment law news for Finance professionals in the trenches of small-to-medium-sized businesses. Rather than simply regurgitating the day's headlines, Resourceful Finance Pro delivers actionable insights, helping Finance execs understand what Finance trends mean to their business.

Privacy Policy | Terms of Service
Copyright © 2023 SuccessFuel

WELCOME BACK!

Enter your username and password below to log in

Forget Your Username or Password?

Reset Password

Lost your password? Please enter your username or email address. You will receive a link to create a new password via email.

Log In

During your free trial, you can cancel at any time with a single click on your “Account” page.  It’s that easy.

preloader