Per the IRS, "Form 1099-K is a report of payments you got during the year from:
- Credit, debit or stored value cards such as gift cards (payment cards)
- Payment apps or online marketplaces (third-party payment networks)
Third-party payment networks are required to file Form 1099-K with the IRS and provide a copy to you when the gross payment amount is more than the threshold amount. Form 1099-K should not report gifts or reimbursement of personal expenses you received from friends and family."
Reporting Threshold
Applications like Cash App, Venmo, PayPal, etc. are required to file a Form 1099-K if you received $20,000 or more using the app during 2023 or had more than 200 transactions. If you receive a 1099-K for the 2023 tax year, you are required to report the income on your tax return. The reporting threshold for 2024 has decreased to $5,000.
You could also receive a 1099-K if you earned income from reselling tickets. Resale sites like Ticketmaster and StubHub are now required to hand over the data of all sellers who make more than the reporting threshold to the IRS.