IRS delays apps payments rule change
Anyone getting paid for their goods and services through apps like Venmo or Etsy just got a reprieve from the Internal Revenue Service.
Friday, the IRS announced it would delay the implementation of a rule change that would have resulted in a virtual paper chase of tax forms going out by January 31, 2023, to anyone using such apps for their business transactions.
The IRS has postponed it by a year.
The move follows concerns from the tax preparation community, the electronic transactions industry and some lawmakers.
The rule would require third-party payment platforms to issue a 1099-K to both the IRS and the individual app user. It would apply for payments that exceed $600 over the course of the year.
A business transaction that is taxable is defined by the IRS as any payment for a good or service, including tips.
It used to be those platforms only had to issue a 1099-K if you engaged in more than 200 business transactions for which you received total payments of more than $20,000 in a year.