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 once your payments to that person reach the reporting threshold — $600 for payments made in 2025, and $2,000 for payments made in 2026 (that higher threshold comes from the One Big Beautiful Bill Act and will be adjusted for inflation starting in 2027). 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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