If you take payments through cards or apps like PayPal, Venmo for business, Stripe, or a marketplace, the 1099-K threshold matters to you — and it just changed again. For 2026 the reporting threshold is back up to $20,000 and 200 transactions, reversing the much lower threshold that had been phasing in. Here is what that means in plain English.
What is the 1099-K threshold for 2026?
For 2026, a payment platform generally only has to send you a Form 1099-K if you receive more than $20,000 and more than 200 transactions through it during the year. The 2025 tax law restored this long-standing threshold after years of plans to drop it to $600. In practice, far fewer small sellers and side-giggers will receive a 1099-K than under the lower threshold.
What is a 1099-K, and who sends it?
A 1099-K is an information form that third-party payment networks and card processors send to report the payments they processed for you. It is sent by the platform — not by you — and it covers payments made by customers through that platform. It is different from the 1099-NEC you issue directly to contractors: the 1099-K comes from the processor and reports gross payment volume, including amounts later refunded or offset by fees.
Do I still owe tax if I do not get a 1099-K?
Yes — the threshold only controls whether a form is sent, not whether the income is taxable. This is the single most important point to understand. All of your business income is taxable and reportable whether or not a 1099-K lands in your mailbox. The higher threshold reduces paperwork; it does not create a tax-free zone. Keeping clean books is how you report the right number, with or without a form to match it against.
- Report all business income, even small amounts under the threshold.
- Separate business and personal payment accounts so personal transfers are not mistaken for income.
- Reconcile any 1099-K you receive to your books — the gross figure often includes fees and refunds you can account for.
How is the 1099-K different from the 1099-NEC change?
The 1099-K and 1099-NEC are two separate forms that both changed under the 2025 law. The 1099-NEC (which you issue to contractors) moved from a $600 to a $2,000 threshold for 2026, while the 1099-K (which processors issue to you) went back to $20,000 and 200 transactions. If your business both pays contractors and accepts card or app payments, both rules apply to you in different ways, and it is worth confirming how each affects your filings. Our Tax & Compliance team helps businesses keep their 1099 reporting straight on both sides.
What should online sellers do now?
Keep complete records of your sales regardless of what forms arrive. Whether you sell on a marketplace, run an e-commerce store, or take card payments in the field, your own records are the source of truth. Track gross sales, fees, refunds, and your cost of goods so your reported income is accurate and your deductions are supported. If a 1099-K does arrive, you will be able to reconcile it quickly instead of scrambling.
What should I do if my 1099-K is wrong?
Reconcile it to your own records first, then contact the issuer to correct genuine errors. Because a 1099-K reports gross volume, it will often look higher than your actual income once fees, refunds, and sales tax are stripped out — that is normal and handled on your return, not an error. A true error is a different story: amounts that are not yours, duplicate reporting, or personal transfers mistakenly included. If you spot one, reach out to the platform that issued the form and ask for a correction. Either way, do not ignore a 1099-K — the IRS receives a copy, so your return should account for it, with any differences explained through your bookkeeping.
Reporting thresholds change often, and the penalties for getting them wrong add up. If you want help sorting out what applies to your business, we are glad to walk through it.