The American Rescue Plan’s Impact on Form 1099-K Reporting Requirements for Third-Party Payment Networks
Blog Blockchain and Financial Services Blog

Another tax year, another change. The annual filing of Form 1099-K (Payment Card [1] and Third-Party Network Transactions [2]) by payment settlement entities for payments made in settlement of reportable payments transactions has seen a change in minimum reporting thresholds for settlement of third-party payment network transactions. The threshold change is as follows:

• For returns for a calendar year prior to 2022:
  • Gross payments that exceed $20,000, AND
  • More than 200 such transactions
• For returns for calendar year after 2021:
  • Gross payments that exceed $600, AND
  • Any number of transactions

While the change does not affect filings this year, it will affect 2023 filings for the 2022 calendar year. The threshold decrease will result in greater 1099-K filings in subsequent years. All payment settlement entities, which are defined as merchant acquiring entities and third-party settlement organizations, whether domestic or foreign, are required to file Form 1099-Ks if they have gross payments that exceed $600 after 2021. Note that these reporting requirements also apply to certain stored-value card payments.