Update: The One Big Beautiful Bill Act, which became law on July 4, 2025, returns the Form 1099-K reporting threshold to $20,000 and 200 transactions. Per the legislation, this takes effect “as if included in section 9674 of the American Rescue Plan Act.” Read One Big Beautiful Bill Act changes 1099 thresholds for more details.
The last few years have shown us that there’s no one single way to earn a living; from freelancers to ride-share drivers to digital nomads to side hustlers, people are finding all sorts of ways to earn money to pay their bills. Of course, the government is right behind them with the appropriate tax forms.
Many business owners are likely familiar with the IRS 1099-K Payment Card and Third Party Network Transactions form. This form is specifically for payments received via a third-party network (e.g., PayPal, Cash App) or credit or debit card transaction.
Businesses reporting this type of income may face different reporting requirements for state and federal taxes (and for some states, like Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming, which don’t have a state income tax). A number of states have combined federal and state filing for the 1099 series of forms, including California and Colorado. Check if your state participates in a combined federal and state filing program.
