If you sell on Etsy, drive for a rideshare app, freelance on the side, or just split a few too many dinner bills on Venmo, you've probably heard some version of "the IRS is coming for your $600." Good news: that's not happening. Under the One Big Beautiful Bill Act (OBBBA), the federal 1099-K threshold is staying at $20,000 and 200 transactions for 2025 and beyond. Here's the full story, because the last few years of back-and-forth have left almost everyone confused about what actually applies.

A Quick History of the 1099-K Rollercoaster

Form 1099-K is issued by payment apps and online marketplaces, think PayPal, Venmo, Cash App for Business, Etsy, eBay, StubHub, and Airbnb, to report the payments you received for goods or services through their platform.

For years, the threshold for getting one of these forms was simple: $20,000 in payments and more than 200 transactions. Then the American Rescue Plan Act (ARPA) of 2021 tried to drop that threshold dramatically, first to $5,000 for 2024, with further cuts scheduled that would have eventually landed at just $600. The idea was to catch more unreported income from gig work and side hustles.

That phase-down created a lot of anxiety, and a lot of extra 1099-Ks for casual sellers, before it ever fully took effect. Then, in July 2025, the OBBBA stepped in and reversed course entirely: it restored the original $20,000 and 200-transaction threshold, and that's what stands for tax year 2025, the return you'll file in 2026, and going forward. No further step-downs are scheduled.

What This Means for You

• If you're a casual seller or occasional gig worker: unless you cross both $20,000 in payments and 200 transactions through a single platform in a calendar year, that platform is not required to send you a 1099-K.
• If you run a real side business through these platforms: you may still clear the threshold, and you'll get the form as usual.
• Either way, this is the important part: not getting a 1099-K does not mean the income isn't taxable. You are still required to report every dollar of business income on your return, whether or not a form shows up in your inbox. The 1099-K is an information return for the IRS, it's not what creates your obligation to report income.

Watch Out for State Thresholds

The federal number is $20,000 and 200 transactions, but several states set their own, lower bar for when a 1099-K has to be issued for in-state activity:

• Maryland, Massachusetts, Vermont, and Virginia: $600, with no minimum number of transactions.
• Illinois: $1,000 and four or more transactions.
• Missouri and Washington, D.C. also apply their own lower thresholds.

If you live or do business in one of these states, don't assume the federal $20,000 rule is the only one that matters. You may get a 1099-K well before you'd expect one federally.

While We're At It: 1099-NEC and 1099-MISC Are Changing Too

Separately from the 1099-K story, OBBBA also raised the reporting threshold for the forms businesses issue to the people they pay: Form 1099-NEC, for nonemployee compensation, and Form 1099-MISC, for rents, prizes, and other miscellaneous payments.

• The old $600 threshold is increasing to $2,000, effective for payments made after December 31, 2025. This first applies to the 2026 tax year, filed in early 2027.
• Starting with 2027 payments, that $2,000 figure will be adjusted annually for inflation, rounded to the nearest $100, using 2025 as the base year.
• For payments made in 2025, the old $600 threshold still applies. This change is not retroactive.

It's easy to lump this in with the 1099-K news since both stories involve "1099" and "threshold," but they're two different forms serving two different purposes: 1099-K is issued by payment processors reporting to you; 1099-NEC and 1099-MISC are forms you issue when your business pays a contractor, vendor, or landlord $2,000 or more.

What To Do Now

1. Don't assume silence means you're off the hook. No 1099-K or 1099-NEC doesn't erase the income from your tax return.
2. Check your state's threshold if you're in Illinois, Maryland, Massachusetts, Missouri, Vermont, Virginia, or D.C.
3. If you run a business that pays contractors or landlords, get comfortable with the new $2,000 threshold now. You have through the end of 2026 before it applies, but your bookkeeping and vendor tracking should start reflecting it going into next year.
4. If 1099-NEC and 1099-MISC compliance still feels murky, that's exactly what our 1099-NEC & 1099-MISC Course (Training Edition) walks you through step by step: who has to file, when, and how to fill out the forms correctly. We'll be updating it to reflect the new $2,000 threshold as it takes effect.

Tax rules like this have a way of changing again before you know it. We'll keep this page updated as the IRS issues further guidance. Bookmark it and check back if you're not sure which rule applies to you.