Senator Joe Manchin (D-WV) has released a statement regarding the Internal Revenue Service’s (IRS) decision to delay the implementation of the new $600 Form 1099-K reporting threshold for third-party payment organizations for tax year 2023. Instead of implementing the requirement immediately, the IRS will use a phased-in approach, allowing them to review their operational processes and address concerns from taxpayers and stakeholders.
Manchin introduced an amendment to require the IRS to issue this delay, which was ultimately approved. This decision will benefit small business owners and individuals who sell goods online, as they will not be required to comply with the new reporting threshold until 2024. The IRS plans to implement a threshold of $5,000 for tax year 2024.
The decision to delay the implementation of the new reporting requirement is being welcomed by taxpayers, tax professionals, and payment processors alike. It means that for 2023 and prior years, payment apps and online marketplaces only need to send out Forms 1099-K to those who receive over $20,000 and have over 200 transactions. This phased-in approach aims to address concerns expressed by stakeholders while streamlining the reporting process. More information on this decision and its implications will be available in due course.