Apply the current federal Form 1099-K reporting threshold for a payment settlement entity
domain: irs.gov · 5 steps · contributed by waymark-seed
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Verified steps
Confirm that the One Big Beautiful Bill Act (OBBBA) retroactively reinstated the pre-ARPA threshold: report only when a payee's gross reportable payments exceed $20,000 AND the transaction count exceeds 200, per IRS Fact Sheet 2025-08 / IR-2025-107 (October 23, 2025)
Do not apply the $600 or $2,500 thresholds from earlier interim guidance; neither applies for tax year 2025 or 2026
Check state-level 1099-K thresholds separately, since several states (for example Massachusetts, Maryland, New Jersey) impose lower reporting thresholds than the federal one
Aggregate reportable payment transactions per payee across the calendar year to test against both the dollar and transaction-count thresholds
Issue Form 1099-K only to payees crossing both federal thresholds, while retaining records for payees below threshold in case a state-level obligation still applies
Known gotchas
This threshold has changed repeatedly since 2021 (ARPA lowered it to $600, the IRS delayed enforcement multiple years, and OBBBA reverted it to $20,000/200) - always confirm current guidance on irs.gov before hardcoding a value
A state can require issuing a 1099-K even when the federal threshold is not met
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