The IRS has delayed a requirement that business owners and freelancers report more than $600 in income from platforms such as PayPal and Venmo.
The agency in a recent notice said it will instead phase in that reporting requirement over the next few years. Taxpayers will be required to report total income of more than $5,000 for the 2024 tax year, more than $2,500 for the 2025 tax year and, finally, more than $600 for 2026.
Meanwhile, the IRS will not penalize anyone for failure to withhold or pay backup tax during the 2024 calendar year but will do so for 2025 and onwards, the agency said.
This is not the first time the IRS has delayed the reporting requirement, having done so in 2022 and then again in late 2023 after a barrage of criticism regarding the move. In 2023 and before, third-party marketplaces and payment apps were required to send out 1099-K forms to taxpayers who received more than $20,000 and had more than 200 transactions.
