No, you will not have to report Cash App or PayPal for shared expenses, etc. as outlined below.
Cash App and Form 1099-K FAQs
In 2022, Congress made changes to the Internal Revenue Service’s (IRS) reporting requirements for the Form 1099-K. You have questions, we have answers.
What were the recent changes to the IRS reporting requirements?
The American Rescue Plan Act of 2021 changed the minimum reporting threshold for certain transactions. The IRS planned to require services like Cash for Business to report payments for goods and services on Form 1099-K when those transactions total $600 or more in a year, starting January 2022.
On December 23, 2022, the IRS announced a one-year delay for the new $600 reporting threshold for Form 1099-K.
Instead, you will receive a Form 1099-K for your Cash for Business account for 2022 if you received more than $20,000 and more than 200 business transactions within a calendar year. Your state may have a lower threshold.
These reporting requirements do not apply to personal Cash App accounts because these transactions are for personal, non-commercial purposes. If you have a Cash for Business account, check out Tax Reporting for Cash For Business for more information.
How these new tax reporting changes may impact you when paying or accepting payments with PayPal and Venmo for goods and services?
Update December 30, 2022
The IRS has recently announced a delay in implementing the $600 reporting threshold for goods and services transactions, reverting the 2022 requirement for Form 1099-K reporting back to the 2021 figures (total payments exceed $20,000 USD and there are more than 200 transactions). This means that similar to prior years, PayPal and Venmo will continue to follow these IRS reporting thresholds. In the case where an individual state has a lower threshold, PayPal and Venmo will report accordingly. We will provide further updates when more information is available. This information is not intended to be, and should not be construed as, tax advice. You should consult your tax advisor regarding your reporting obligations.
Update March 4th, 2022
Recently, there have been some questions regarding changes U.S. tax reporting requirements that could impact the information PayPal shares with the Internal Revenue Service (IRS) about transactions made using PayPal and Venmo for the sale of goods and services. We’ve answered some of the most pressing questions below – and we’ll be sure to keep this list updated as more details are finalized.
Q: Will I have to pay taxes when sending and receiving money on PayPal and Venmo - what exactly is changing?
Beginning January 1, 2022, the Internal Revenue Service (IRS) implemented new reporting requirements for payments received for goods and services, which will lower the reporting threshold to $600 for the 2022 tax season, from 2021’s threshold of $20,000 and 200 transactions. Here’s some more detail:
- 1099-K Threshold Change:
- This new Threshold Change is only for payments received for goods and services transactions, so this doesn’t include things like paying your family or friends back using PayPal or Venmo for dinner, gifts, shared trips, etc.
- This change was introduced in the American Rescue Plan Act of 2021, which amended some sections of the Internal Revenue Code to require Third-Party Settlement Organizations (TPSOs), like PayPal and Venmo, to report goods and services transactions made by customers with $600 or more in annual gross sales on 1099-K forms. Currently, a 1099-K is only required when a user receives more than $20,000 in goods and services transactions and more than 200 goods and services transactions in a calendar year.
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