You will receive a Form 1099-K from third-party networks or financial institutions for income received through electronic forms of payments by Jan. Understanding your Form 1099-K for Cash App Tax Reporting The new law would require users to receive Form 1099-K for payments of goods and services over $600 without any needed minimum transaction, which means more people will receive the forms. More than 200 transactions within the current year.Gross payments that exceed $20,000, AND.Under the prior law, the IRS required payment card and third party networks to issue Form 1099-K to report certain payment transactions that met the following reporting threshold: Related: Best Credit Cards 2022 New Cash App Tax Reporting for Payments $600 or more

Here’s how the new tax reporting will work. The law says that only third-party payment companies that handle the settlement of funds (a process of transferring funds from a buyer to a seller in a transaction) are required to send 1099K forms to users.Įarly Warning Services, LLC, the network operator of Zelle, said in an email statement that Zelle doesn’t settle funds but rather provides messaging between a financial institution and people making the payments.īefore implementing the law, the IRS required reporting if payments exceeded $20,000 or more and more than 200 completed during the year. The $1.9 trillion stimulus package was signed into law in March by President Joe Biden, which changed tax reporting requirements for third-party payment networks.Īnd while this rule applies to most third-party payment networks, Zelle said it’s not subject to this law. The new rule is a result of the American Rescue Plan. The new tax reporting requirement will impact 2022 tax returns filed in 2023. 1, 2022, third-party payment network providers will be required to send users a Form 1099-K, Payment Card, and Third Party Network Transactions for transactions made during the 2022 tax year by mail or electronically. If you receive $600 or more payments for goods and services through a third-party payment network, such as Venmo, or CashApp, these payments will now be reported to the IRS.īeginning Jan.

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