Update on new 1099-K rules from the IRS:
The IRS has officially postponed the $600 filing requirement of 1099-Ks for platforms like Venmo and CashApp by one year.
New 1099 Rules
In case you’re not aware, there are new 1099 rules that started in 2022. If you receive over $600 of income from payment processors like Square, Venmo, or Cash App, you will receive a 1099-K. Some members of Congress are trying to change this, but as it stands now, the rules haven’t changed. I’m going to go over what you need to know regarding 1099s and 1099-Ks so you’re ready.
1099 Reporting Requirements for 2022 at a Glace
Below we list the type of income, type of 1099, and new 1099 thresholds for 2022.
| Type of income | Threshold Amount | Type of 1099 |
|---|
| Independent Contractors, Professional Fees, & Commission Payments | $600 or more | 1099-NEC |
| Payments through online platforms | $600 or more | 1099-K |
| Dividends, Interest, and Royalties | $10 or more | 1099-DIV, 1099-INT, or 1099-MISC |
| Professional Fees | $600 or more | 1099-NEC |
| Professional Fees to Doctors | $600 or more | 1099-MISC |
| Rent collected | $600 or more | 1099-MISC |
| Payments to Attorneys for Services | $600 or more | 1099-MISC |
| Payments to Attorneys for Settlements | All | 1099-MISC |
1099 Deadline 2022
Depending on the type of 1099 you’re filing, and how you file them with the IRS, there are different due dates. In general, all 1099s are due to both the IRS and recipients by January 31st.
However, 1099-MISC, for things like rent, professional fees, payments to doctors, etc., have different due dates to the IRS depending on whether or not you file them electronically or by paper.
Here are the 1099 deadlines for 2022:
| Type of 1099 | Due Date – Electronically Filed | Due Date – Paper Filed | Due Date – Recipients |
|---|
| 1099-MISC | March 31st, 2023 | February 28th, 2023 | January 31st, 2023 |
| 1099-NEC | January 31st, 2023 | January 31st, 2023 | January 31st, 2023 |
| 1099-K | March 31st, 2023 | February 28th, 2023 | January 31st, 2023 |
1099-K Q&A:
In case you are not sure what a 1099-K is, it’s a special 1099 that was created after the dot com boom for online sales platforms like eBay.com. We wrote an article that talks about what they are here.
Who will not receive a Form 1099-K?
Exactly who or will not receive a 1099-K?
If your income from an online reporting platform is $600 or more, you will receive a 1099-K.
What about Zelle, Venmo, and Similar payment processors?
Does this mean that Zelle, Venmo, and Cash App are going to send me a 1099-K?
- Zelle – No
- Venmo – Yes
- Cash App – Yes
- Airbnb – Yes
- VRBO – Yes
Venmo (PayPal) and Cash App (Square) are 3rd party processors where you can hold money (like a bank account), so you will receive a 1099-K from them. However, Zelle, is not a 3rd party processor. It is an ACH network that is run by banks, so you will not receive a 1099-K for Zelle transactions.
Conclusion – Will they change the rules?
Is it possible that they might change the rules?
There are politicians on both sides of the isle that are trying to change the reporting thresholds. Republicans are trying to make the amount go back up to $20,000, instead of $600. Some Democrats are trying to raise the limit to $5,000. We will update this article if anything changes.