IRS webinar: 1099‑K reporting threshold reverted to $20,000/200 and applied retroactively

Richard Furlong, senior Stakeholder Liaison at the Internal Revenue Service, told webinar attendees that the One Big Beautiful Bill (Public Law 119‑21) reverts third‑party settlement reporting for Form 1099‑K to the pre‑2021 thresholds and makes that change retroactive to 2021. "So it's back to the future, in other words," he said.

Furlong said under the restored rule a payment settlement entity must file a 1099‑K only when the gross amount of reportable transactions to a payee exceeds $20,000 and the number of transactions exceeds 200 in a calendar year. He emphasized the provision is retroactive to 2021 and noted that Treasury and the IRS issued proposed regulations on Jan. 8, 2026, to clarify backup‑withholding treatment.

"These proposed regulations issued on January 8th would not require backup withholding when the third party settlement organization is not required to issue a 1099‑K, because the total amounts received are less than $20,000 and the transactions do not exceed 200," Furlong said.

Furlong cautioned payees and practitioners that although the filing thresholds have changed, income remains taxable even if a payer does not issue a 1099‑K. He directed attendees to IRS guidance and the OBBB landing page for updates and said the agencies will consider stakeholder feedback before issuing final rules.

What this means for taxpayers: gig‑economy participants and small sellers who received many low‑value payments during 2021–2025 should review whether they received 1099s under the prior $600 rule; practitioners should watch for the final regs and guidance that will address operational and withholding questions.

The webinar pointed attendees to IRS resources for additional details and to the proposed regulations for guidance on backup withholding.