You are quoting the federal requirement for E-bay to issue you a 1099-K. You are required to report any 1099 income that nets you $400 or more in earnings. You are definitely required to report on $2500 1099-K on both your federal and state tax returns. The IRS received a copy of your 1099 and will expect it to be reported. You may get a letter from the IRS if you don't include this income.
Also, all state income figures are pulled from the federal return, so this income needs to be entered on your federal return first. TurboTax will transfer it to your state returns for you.
You should enter the full amount of the 1099-K and deduct all of your related expenses. This will reflect your true NET income on both returns. When you enter the 1099, yes it may put you in another tax bracket, but when you add your expenses, it will adjust back down. If your expenses = your income it will be a wash, yet get reported also.
