Beginning in 2023,\u00a0third-party payment networks\u00a0must file\u00a0Form 1099-K\u00a0with the IRS and provide a copy to the taxpayer when the gross payment amount exceeds $600. However, not all payments from third parties are taxable. Taxpayers can take steps to prevent non-taxable items from being reported. They also can remedy a third-party payment reported in error.<\/p>\n\n\n\n
Payment card companies, payment apps, and online marketplaces must file Form 1099-K with the IRS. They must send taxpayers a copy of the form by January 31. Taxpayers should expect a Form 1099-K if they received (1) payments with payment cards, including credit cards, debit cards, and stored value cards (gift cards), and (2) payments of over $600 with a payment app or online marketplace. This includes payments for a personal item or goods sold, services provided, or property rented through a:<\/p>\n\n\n\n
Zelle<\/a> says the new IRS 1099-K reporting rules for third-party payment processors do not apply to them. Some people are leaving payment services that issue 1099-K\u00a0forms\u00a0in favor of Zelle. However, if people continue leaving payment services that issue 1099-K\u00a0forms\u00a0in favor of Zelle, Congress could extend the law to include Zelle, or the IRS could investigate such transactions.<\/p>\n\n\n\n Gifts or\nreimbursement of personal expenses from friends and family should not be\nreported on Form 1099-K. They are not payments for goods or services.<\/p>\n\n\n\n Thus, for example, if the taxpayer shares the cost of a car ride or a restaurant meal, is repaid by a roommate for a household bill, or receives money for a birthday or holiday gifts, the payments are not taxable income, and therefore should not be reported on Form 1099-K.<\/p>\n\n\n\n The IRS\nadvises taxpayers using payment apps for the above non-taxable items to note\nthese types of payments as non-business in the payment apps when possible.<\/p>\n\n\n\n A taxpayer\nmay receive a Form 1099-K in error if the form reports payments that were gifts\nor reimbursements from family or friends, doesn’t belong to the taxpayer, or is\na duplicate.<\/p>\n\n\n\n If the\ntaxpayer received a Form 1099-K in error<\/a> or\nan incorrect form, the taxpayer should contact the issuer immediately. To\nlocate the issuer, the taxpayer should see “FILER” in the top left\ncorner of the Form 1099-K.<\/p>\n\n\n\n The\ntaxpayer should keep a copy of the original form and all correspondence with\nthe issuer.<\/p>\n\n\n\nWhat Should Not Be Reported on\nForm 1099-K<\/strong><\/h3>\n\n\n\n
How to Prevent Non-taxable Items\nFrom Being Reported on Form 1099-K<\/strong><\/h3>\n\n\n\n
What To Do if the Taxpayer\nReceives a Form 1099-K in Error or an Incorrect Form\n1099-K<\/strong><\/h3>\n\n\n\n