According to the IRS website, payment apps and online marketplaces are required to file a Form 1099-K if the gross payments to you for goods and services are over $600. This means that during the 2023 year if you sold anything on sites such as eBay, PayPal, Venmo, Etsy, or Amazon over $600, you may receive a Form 1099-K at the end of the year, and this income will have to be included in your taxable income on your Form 1040 Federal tax return.
You should get a Form 1099-K in the following situations:
- If you received any payments with payment cards. This includes credit cards, debit cards and stored value cards (gift cards).
- If you received payment over $600 with a payment app or online marketplace. This includes payments for a personal item you sold or for goods you sell, services you provide or property you rent through any:
- Peer-to-peer payment platform or digital wallet
- Online marketplace (sale or resale of clothing, furniture and other items)
- Craft or maker marketplace
- Auction site
- Car sharing or ride-hailing platform
- Real estate marketplace
- Ticket exchange or resale site
- Crowdfunding platform
- Freelance marketplace
Gift or reimbursement of personal expenses from friends and family should not be reported on Form 1099-K. They are not payments for goods or services.
What should not be Reported on Form 1099-K
Money you received from friends and family as a gift or reimbursement of a personal expense should not be reported on a Form 1099-K. For example: Sharing the cost of a car ride or meal, receiving money for birthday or holiday gifts or getting repaid by a roommate for a household bill. These payments aren’t taxable income.
Be sure to note these types of payments as non-business when possible in the payment apps.