If you receive $600 or more payments for goods and services through a third-party payment network, such as Venmo, or CashApp, these payments will now be reported to the IRS on Form 1099K.
Beginning Jan. 1, 2022, third-party payment network providers will be required to send users a Form 1099-K, Payment Card, and Third Party Network Transactions for transactions made during the 2022 tax year by mail or electronically. The new tax reporting requirement will impact 2022 tax returns filed in 2023. And while this rule applies to most third-party payment networks, Zelle said it’s not subject to this law.
While this new law requires new tax reporting requirements, it does not change the existing tax law, meaning taxable or nontaxable for tax reporting.
Form 1099-K is an informational tax form and may include amounts considered excluded from gross income for tax purposes.
If you receive money considered a nontaxable source, you will not need to report on your tax return.
Some examples of money received that may be excluded from your income are:
- Money received from a friend as a reimbursement
- Money received from a roommate to pay their share of the rent
- Money received from a loved one as a gift
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