New Form 1099-K Threshold for the 2025 Tax Year
In July 2025, the IRS officially repealed the planned lower reporting thresholds for Form 1099-K through the “One Big Beautiful Bill Act.” This update reinstated the previous reporting requirement, alleviating the compliance burden for third-party settlement organizations (TPSOs), such as payment apps and online marketplaces.
For the 2025 tax year, TPSOs are now required to file Form 1099-K only if total payments to a recipient exceed $20,000 and there are more than 200 transactions during the year.
In this article, we will discuss the details of the Form 1099-K threshold change for the 2025 tax year, providing a comprehensive understanding of how it may affect you or your business.
Table of Contents:
Overview of the Form 1099-K
Form 1099-K reports payment transactions made through third-party settlement organizations (TPSOs), which include payment apps, online marketplaces, and card processors. The form helps ensure that income received through such platforms is correctly reported to the IRS.
The new 1099-K reporting threshold for the 2025 tax year
The IRS has repealed the $600 threshold for Form 1099-K that was set to take effect under the American Rescue Plan Act. As a result, for the 2025 tax year, the reporting requirement has returned to the previous standard.
For the 2025 tax year, third-party settlement organizations (TPSOs)—such as payment apps and online marketplaces—must file Form 1099-K only when total payments exceed $20,000 and more than 200 transactions during the year.
Why this Change?
- To eliminate confusion and compliance challenges surrounding the phased lower thresholds.
- To reduce the reporting burden on small businesses, casual sellers, and TPSOs.
What are the state filing requirements for 1099-K?
State filing requirements for Form 1099-K can vary from the federal filing requirements. It's essential to be aware of these differences to ensure compliance with state tax regulations.
State reporting requirements can change from year to year, and for the year 2025, some states haven’t released their updated reporting requirements yet. This section will be updated once the state authorities release their reporting requirements for 2025, ensuring that you have the most current information to fulfill your tax obligations accurately and in compliance with
state regulations.
Here are the state filing requirements for Form 1099-K for 2025.
| State | Filing requirement | Threshold |
|---|---|---|
| Arizona | If State Withholding | Form 1099-K should be reported regardless of the $5,000 filing threshold. |
| Arkansas | CF/SF | Form 1099-K should be reported regardless of the $2,500 filing threshold. |
| Colorado | If State Withholding | Form 1099-K should be reported regardless of the $5000 filing threshold. |
| District of Columbia | Direct State filing | File if threshold is $5,000 |
| Georgia | If State Withholding | Form 1099-K should be reported regardless of the $5,000 filing threshold. |
| Idaho | CF/SF | Form 1099-K should be reported regardless of the $5,000 filing threshold. |
| Illinois | Direct State filing | $1,000 and 4 transactions |
| Indiana | Direct State filing | Form 1099-K should be reported regardless of the $5,000 filing threshold. |
| Iowa | If State Withholding | Form 1099-K should be reported regardless of the $1,500 filing threshold. |
| Kansas | If State Withholding | Form 1099-K should be reported regardless of the $5,000 filing threshold. |
| Kentucky | If State Withholding | Form 1099-K should be reported regardless of the $5,000 filing threshold. |
| Louisiana | CF/SF | Form 1099-K should be reported regardless of the $1,500 filing threshold. |
| Maryland | CF/SF | $1,500 |
| Massachusetts | Direct State filing | $1,500 |
| Minnesota | If State Withholding | Form 1099-K should be reported regardless of the $1,500 filing threshold.s |
| New Jersey | CF/SF | $1,000 and 0 transaction |
| Rhode Island | If State Withholding | Form 1099-K should be reported regardless of the $1,500 filing threshold. |
| South Carolina | If State Withholding | Form 1099-K should be reported regardless of the $1,500 filing threshold. |
| Utah | Direct State filing | Form 1099-K should be reported regardless of the $1,500 filing threshold. |
| Vermont | Direct State filing | $1,500 and 0 transaction |
| Virginia | Direct State filing | $1,500 and 0 transaction |
| Wisconsin | If State Withholding | Form 1099-K should be reported regardless of the $1,500 filing threshold. |
When is the Deadline to file Form 1099-K for the 2025 tax year?
Like other 1099 forms, the 1099-K follows the same deadline. Here is the Form 1099-K deadline for the 2025 tax year.
| E-filing Deadline | Recipient Copy Deadline | Paper Filing Deadline |
|---|---|---|
| March 31, 2026 | February 2, 2026 | March 2, 2026 |
While many states share the same deadline as the IRS for 1099-K reporting, there are exceptions. Learn more about state-specific filing requirements for 1099-K.
Automate 1099-K Filing with TaxBandits API!
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How to file Form 1099-K for 2025?
E-filing is the easiest way to report 1099-K payments to the IRS. Filing paper forms is a longer and less efficient process. Plus, if you are required to file more than 10 tax Forms with the IRS, your business is required to e-file regardless. TaxBandits helps you e-file Form 1099-K in just a few simple steps.
- Step 1: Enter the Form information
- Step 2: Review the Form information
- Step 3: Transmit the form to the IRS and state
- Step 4: Send recipient/payee copies through postal mailing or online access.
Why wait? Get started with TaxBandits today to e-file Form 1099-K and get the filing status in minutes. Pricing starts
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