1099-K from ebay for 2022

Financial Planning Tax Strategies
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Many states gave rebates, such as the California middle class rebate.

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IRS asking people to delay filing until they clarify if the rebates are taxable or not:

https://finance.yahoo.com/news/irs-warns-taxpayers-hold-off-143720562.html

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Sorry, I don’t currently live in a state that charges an income tax, much less gave rebates. That said, if it’s truly a rebate on income taxes (as the term ‘tax rebate’ implies), and was tied in some way to the amount of state income taxes that you paid, it likely will be in the same class as a tax refund, and therefore, taxable. If it’s a rebate that was given based on some other criteria, then it would depend on what criteria were used. So there may be different answers for different states.

AJ

1 Like
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I just read something that sounds like they changed their minds about changing the threshold from $20K to $600. Maybe $5K instead of $600 starting in 2024?

" for 2023 and prior years, payment apps and online marketplaces are only required to send out Forms 1099-K to taxpayers who receive over $20,000 and have over 200 transactions . For tax year 2024, the IRS plans for a threshold of $5,000 to phase in reporting requirements."

See:
https://www.irs.gov/newsroom/irs-announces-2023-form-1099-k-reporting-threshold-delay-for-third-party-platform-payments-plans-for-a-5000-threshold-in-2024-to-phase-in-implementation#:~:text=This%20means%20that%20for%202023,to%20phase%20in%20reporting%20requirements.

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I think that the first sentence of the press release you linked to explains it more clearly than the sentence you quoted:

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It’s a delay in implementing of the change of threshold from $20k all the way down to $600, not a change in the law, or Congress changing their minds. (Congress is who makes the law, the IRS just implements the laws that Congress sets.)

As also stated in the press release, 3rd party payers could issue 1099s in any amount, even if it’s less than $5000. However, if your transactions in 2024 exceed $5000 (or the number of transactions exceeds 200), they will be required by the IRS to issue a 1099 for your 2024 transactions.

Since it’s being phased in, I would expect that by 2026 or 2027, the IRS will start requiring 3rd party payers to follow the law and issue 1099s for $600 or more in transactions, depending on how things go for the 2024 returns.

AJ

3 Likes
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Thanks for the clarification AJ :slight_smile: