Form 1099-K, Payment Card and Third-Party Network Transactions is an IRS information return used to report transactions made via payment settlement entities. If a business accepts payments via credit card, debit card and third-party payment networks like PayPal, they will receive a Form 1099-K for the year. For 2021 and prior years, each payment settlement entity was required to send a Form 1099-K to the recipient by January 31st if the business received over $20,000 in gross payments and had over 200 separate transactions in a calendar year.
As of January 1, 2022, the threshold has been significantly decreased to $600 and there is no minimum transaction requirement. In addition to the payment settlement entities, all third-party peer-to-peer payment apps, including Zelle and Venmo are also required to issue Form 1099-K. As a result of this change, many businesses will receive multiple Forms 1099-K for the calendar year 2022. The IRS has pushed for this change to improve the accuracy of reporting and overall tax transparency.