IRS Forces Gig Workers to Report over $600 Threshold of Venmo, PayPal Payments

The IRS reminded gig workers this week to report payments over a $600 threshold made through third party payment apps, such as Zelle, Cash App, Venmo, and PayPal.

As a result of President Joe Biden’s American Rescue Plan Act of 2021, gig workers will now be forced to report income over $600 to the IRS on a form called the 1099-K, the agency said Tuesday.

The new rule is intended to compel American workers to “pay your fair share,” an idea that Biden has pushed for the wealthy but not average Americans — until now.

According to the agency, the third party payment apps will send each individual a 1099-K by January 31 for the income received in the prior calendar year. The specific rules state:

  • From all payment card transactions (e.g., debit, credit, or stored-value cards), and
  • In settlement of third-party payment network transactions above the minimum reporting thresholds as follows:
    • For returns for calendar years prior to 2022:
      • Gross payments that exceed $20,000, AND
      • More than 200 such transactions
    • For returns for calendar years after 2021:
      • Gross payments for goods or services that exceed $600, AND
      • Any number of transactions

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