1099-K Threshold Checker

The 2026 1099-K Threshold Explained

Form 1099-K is an information return that third-party payment processors and online marketplaces file with the IRS. The form reports the gross amount of payment transactions processed on behalf of a seller during the calendar year. The legal authority for 1099-K reporting is IRC §6050W, which was enacted as part of the Housing and Economic Recovery Act of 2008.

Under the current federal threshold, a platform is required to issue a 1099-K when a seller meets both of the following conditions in a single calendar year:

• $20,000 or more in gross payments, AND
• 200 or more separate payment transactions

Both conditions must be satisfied. A seller with $50,000 in gross sales but only 150 transactions does not trigger the federal reporting requirement. Likewise, a seller with 500 transactions but only $8,000 in gross sales does not meet the threshold.

How We Got Here: The ARPA and OBBBA Timeline

The American Rescue Plan Act (ARPA), signed in March 2021, lowered the 1099-K threshold to $600 with no transaction minimum, effective for tax year 2022. However, the IRS delayed implementation three times — issuing Notice 2023-10, Notice 2023-74, and Notice 2024-85 — citing concerns about taxpayer confusion.

The One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, permanently restored the threshold to $20,000 and 200 transactions. This ended four years of regulatory uncertainty. The restoration is codified in the amended text of IRC §6050W(e).

States With Lower 1099-K Thresholds

Nine states (and the District of Columbia) have enacted their own 1099-K reporting thresholds that are lower than the federal threshold. A seller who does not meet the federal threshold may still receive a 1099-K if they reside in one of these states.

State thresholds are based on legislation current as of early 2026. Verify with your state’s tax authority for the most current requirements.

What the 1099-K Reports (and What It Doesn’t)

The 1099-K reports gross payment volume — the total dollar amount of all payment transactions processed through a platform. This number includes:

• The full sale price paid by buyers
• Shipping charges collected from buyers
• Sales tax collected (in most cases)
• Returns that were later refunded

The 1099-K does not report:

• Your profit or taxable income
• Your cost basis (what you originally paid for items)
• Platform fees deducted from your payouts
• Shipping costs you paid
• Whether a sale was a personal item sold at a loss

The gross amount on a 1099-K is almost always higher than the seller’s actual taxable income. In many cases — particularly for casual sellers of personal items — the taxable amount is zero because items were sold for less than the original purchase price.

1099-K Does NOT Equal Taxable Income

This is the single most misunderstood aspect of the 1099-K. Receiving a 1099-K does not mean the entire amount is taxable. The 1099-K is a reporting document, not a tax bill.

Taxable income from selling is calculated as:

Taxable Gain = Sale Price − Cost Basis − Selling Expenses

Cost basis includes the original purchase price, shipping paid at acquisition, authentication or grading fees, buyer’s premiums, and sales tax paid. Selling expenses include platform fees, promoted listing costs, and shipping to the buyer. Only the net gain — if any — is subject to tax.

For a detailed walkthrough of how to reconcile a 1099-K with your actual tax obligation, see the eBay 1099-K guide.

What If You Don’t Get a 1099-K?

The absence of a 1099-K does not eliminate a seller’s tax obligation. Under IRC §61, gross income includes “all income from whatever source derived.” This applies regardless of whether any information return (1099-K, 1099-MISC, or otherwise) is issued.

If items were held as investments and sold at a gain, that gain is taxable. If items were part of a trade or business, the income is taxable. The 1099-K threshold is exclusively a platform reporting requirement — it determines when eBay, StockX, Whatnot, and other platforms must file an information return with the IRS. It has no bearing on the seller’s underlying tax obligation.

Sales of personal-use items at a loss are not taxable and do not need to be reported (though maintaining records is advisable in case of IRS inquiry). Sales of personal-use items at a gain are reportable as capital gains.

Sources

• IRC §6050W — Returns relating to payments made in settlement of payment card and third party network transactions
• IRC §61 — Gross income defined
• One Big Beautiful Bill Act (OBBBA) — Signed July 2025; permanently restored the $20,000/200 transaction threshold
• IRS Notice 2023-10, 2023-74, 2024-85 — Delayed implementation of the $600 ARPA threshold