12/06/2023

IRS Extends Delay of New Reporting Threshold for Cash Apps

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The Internal Revenue Service (IRS) recently announced a reprieve for individuals who have received more than $600 through payment apps like Venmo, PayPal or Cash App this year. The agency revealed that it is once again postponing the enforcement of a 2021 law mandating payment platforms to issue tax forms, known as 1099-Ks, to recipients with more than $600 in earnings during the current tax year.

This marks the second consecutive year the IRS has deferred the implementation of the new regulation. Following last year’s decision to push back the law until 2023, the agency has now extended the delay by an additional year. The rationale behind this extension is to "reduce taxpayer confusion" based on feedback from taxpayers, tax professionals, and payment processors.

Without this delay, an estimated 44 million 1099-K forms would have been dispatched to millions of taxpayers for the current tax year, even if they did not owe taxes on the payments and were not expecting such documentation, according to the IRS. Instead, the IRS will stick to an existing threshold—more than 200 transactions exceeding $20,000 in income—for sending 1099-Ks in early 2024 to complete the current tax year’s returns.

Please select this link to read the complete article from OSAP Mission Partner Clark Schaefer Hackett (CSH).