Quick reference — 2025/2026 Form 1099-K threshold
Form 1099-K reporting threshold — currently $20,000 AND more than 200 transactions per third-party settlement organization (Venmo, PayPal, Etsy, Stripe, etc.).
If you receive payments at or below either threshold from a single TPSO for goods or services, that platform isn’t required to issue you a 1099-K. You still owe tax on income — the 1099-K is just a reporting form, not the trigger for taxability.
Why this looks confusing: The American Rescue Plan (2021) lowered the threshold to $600 with no transaction count, but the IRS delayed enforcement multiple times (phase-in to $5,000 in 2024, $2,500 in 2025, $600 in 2026). Per the IRS’s current 1099-K page (last updated November 2025), the $20,000 / 200-transactions threshold is now what platforms apply. (Confirm against current IRS guidance for any specific tax year.)
Source: IRS — Understanding Your Form 1099-K. Verified May 2026.
If I paid all my contractors via PayPal, do I need to issue any 1099s?
It depends! If you pay a person or business via PayPal’s Friends and Family option, you will need to send a 1099-NEC to them. When you use this method to transfer funds, PayPal assumes it’s a non-business transaction and doesn’t include it in their 1099-K.
If you paid the contractor via PayPal business, you do not have to issue the contractor a 1099-NEC. PayPal is considered a third-party merchant and they are required to issue their own 1099 forms, called a 1099-K.
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