If Pay Pal sent you a 1099-K, you have to report it on your federal and state returns. The $600 threshold determines whether or not PayPal has to send you the form. But you have to report all of your income, whether or not you receive a 1099-K. You report all of your income (whether or not you have a tax form) on your federal return. TurboTax will automatically transfer income from your federal return to your state return.
Some payment processors are already complying with the new changes, while others are postponing issuing 1099-Ks until next year. You would have to double check with PayPal to see if they sent or are sending you the tax form. They have until 01/31 to send you the form if they are going to. But remember, you have to claim any income you received whether or not you get a form.
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