IRS Form 1099-K Threshold for the 2024 Tax Year

Charles Hardy | Last Updated: March 10, 2025

New Form 1099-K Threshold is $5,000 for the 2024 Tax Year - E-file Today!

New Form 1099-K Threshold for the 2024 Tax Year

In November 2024, the IRS announced much-needed transition relief for third-party settlement organizations (TPSOs), such as payment apps and online marketplaces. This relief introduced the reporting thresholds for Form 1099-K, easing the compliance burden on TPSOs during the 2024 tax year. For the 2024 tax year, TPSOs must file Form 1099-K only if the aggregate payments to your payee exceed $5,000, regardless of the number of transactions.

In this article, we will discuss the details of the Form 1099-K threshold change for the 2024 tax year, providing a comprehensive understanding of how it may affect you or your business.

Table of Contents:

Overview of the Form 1099-K
The new 1099-K reporting threshold for the 2024 tax year
What are the state filing requirements for 1099-K?
Deadline to file Form 1099-K
Automate 1099-K Filing with TaxBandits API!
How to file Form 1099-K for 2024?

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 2024 tax year

The IRS has announced a new reporting threshold for Form 1099-K applicable to the 2024 tax year as part of a phased approach to reporting requirements for third-party settlement organizations (TPSOs). These organizations must report transactions when payments to your payee exceed $5,000, regardless of the number of transactions. This threshold is a temporary adjustment as the IRS transitions toward the lower reporting requirements established by the American Rescue Plan Act of 2021.

In 2025, the reporting threshold for 1099-K will decrease to $2,500, and TPSOs will not be required to report unless this threshold is exceeded, with no penalties for non-compliance. Starting in 2026, the reporting threshold will further drop to $600 in aggregate payments, meaning any participating payee receiving over $600 will receive a Form 1099-K, regardless of the number of transactions.

Why this Change?

To ease the transition for TPSOs as they adapt to enhanced compliance and reporting requirements.
To gradually provide time for businesses and taxpayers to adjust to the lower thresholds.

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 2024, some states haven’t released their updated reporting requirements yet. This section will be updated once the state authorities release their reporting requirements for 2024, 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 2024.

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 2024 tax year?

Like other 1099 forms, the 1099-K follows the same deadline. Here is the Form 1099-K deadline for the 2024 tax year.

E-filing Deadline	Recipient Copy Deadline	Paper Filing Deadline
March 31, 2025	January 31, 2025	February 28, 2025

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!

The lowered 1099-K reporting threshold means an increase in the number of forms you’ll need to file. Streamline the filing process by integrating TaxBandits API with your software to automate the generation and filing of 1099-K forms. Learn More!

How to file Form 1099-K for 2024?

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.

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