The IRS loves to keep us on our toes. Just when you were getting used to the idea of receiving a Form 1099-K for any side gig that earned you more than $600, Uncle Sam hit the brakes. After rolling out the new rule, the IRS effectively said, “Scratch that, reverse it,” and pushed the reporting threshold back to where it was — at a much higher, less common amount.
What Changed
In July 2025, President Trump signed a law that reversed a planned change to the tax code. The IRS had intended to lower the reporting threshold for Form 1099-K to just $600, a move that would have required platforms like Etsy and eBay to send out forms for even small-scale sellers. The new law effectively canceled that plan, meaning the dreaded $600 threshold is no more.
Here’s what the new law does:
- Resets the threshold: Reverts reporting back to $20,000 in payments AND more than 200 transactions, retroactive to 2022.
- Repeals $600 rule: Scraps the phased rollout, which was supposed to drop to $5,000 in 2024, $2,500 in 2025 and $600 in 2026).
- Raises other 1099 thresholds: Starting in tax year 2026, 1099-NEC and 1099-MISC filing thresholds jump from $600 to $2,000, with automatic inflation adjustments.
- Reduces the burden on gig workers: Hobby sellers and one-off side hustles won’t trigger extra forms.
- You are still responsible: Even without a 1099-K, all taxable income must be reported. Keep records.
A gig worker would receive a Form 1099-NEC to report nonemployee compensation from a business, such as payments for freelance writing or consulting services, and a Form 1099-MISC to report other income, like rental payments or prizes.
Why the IRS Cared (and Why They Don’t Anymore)
The old plan was about catching unreported income. Every $600 payment through PayPal, Venmo, Etsy or Uber would have generated a form. That would’ve meant mountains of paperwork for taxpayers, platforms and the IRS itself.
Critics called it “burdensome.” Congress agreed. The new law raises the bar, making 1099-Ks what they used to be — forms targeting high-volume sellers, not weekend guitar teachers or one-off eBay flippers.
What This Means for You
If you drive Uber full time or run a serious Etsy shop, nothing really changes; you’ll still get a 1099-K once you hit the $20,000 and 200-transaction mark. But if you’re just unloading old Pokémon cards or renting your paddleboard twice a summer, relax. The IRS won’t be mailing you anything new.
But don’t get sloppy. Whether you receive a 1099-K or not, the law still says you must report all taxable income. Keep your receipts, mileage logs and PayPal records. A clean paper trail today saves headaches tomorrow.
The Bottom Line
The IRS tried to cast a wide net. Congress just cut the holes bigger. For most casual sellers and gig dabblers, the 1099-K is once again a rare creature.
So keep hustling. Track your earnings. But unless you’re moving serious volume, the only thing you’ll get in the mail is junk coupons and jury duty notices, not a shiny new tax form.
