The 1099-K threshold for 2026 is the old one again: a payment settlement company files a Form 1099-K only if your gross payments exceed $20,000 and you had more than 200 transactions. The $600 rule that card sellers braced for never arrived. This guide covers where that leaves a part-time seller on Whatnot, eBay, PayPal or Venmo, which states still report lower, and how to turn the Box 1a number into your real profit. Facts are as of 17 October 2026, and the federal threshold was re-checked against the IRS and 26 U.S.C. 6050W(e) on 25 October 2026.
What the One Big Beautiful Bill changed
The American Rescue Plan Act of 2021 had cut the threshold to $600 with no transaction count. The IRS then delayed it year by year, with a planned phase-in of more than $5,000 for 2024, more than $2,500 for 2025 and more than $600 from 2026.
The One Big Beautiful Bill (P.L. 119-21, section 70432) undid that. The IRS fact sheet FS-2025-08, issued with IR-2025-107 on 23 October 2025, says the law “retroactively reinstated the reporting threshold in effect prior to the passage of the American Rescue Plan Act of 2021”, so a third party settlement organization does not file unless gross payments exceed $20,000 and the number of transactions exceeds 200.
How far back does “retroactively” go? The IRS pages don’t name a year. The statute’s effective-date note says the change takes effect as if included in ARPA section 9674, which applied to calendar years beginning after 31 December 2021. Read together, that means calendar 2022 onward. That date is our reading of the statute, not an IRS statement. The transition notices that set the phase-in are obsoleted as of 9 January 2026, according to the proposed regulations published that day.
Two things the change did not touch:
- Taxability. The IRS says you must report all income, including amounts not on any form. A seller with $8,000 of profit and no 1099-K still reports $8,000.
- Payment cards. The IRS says there is no threshold for payment card transactions: “if you received $0.01 of payments from a payment card transaction, you should receive a Form 1099-K.” That matters if you run a card reader at shows.
Backup withholding
The same law limits backup withholding on payment network transactions to payees above the $20,000 and 200 thresholds. The Treasury and IRS published proposed regulations on 8 and 9 January 2026 (IR-2026-03), proposed to apply to payments made in calendar years beginning after 31 December 2024. We could not confirm that they have been finalized. In practice, give each platform a correct taxpayer ID so the question never comes up.
How the threshold works for eBay, Whatnot and Venmo
The test runs per payment settlement company, not across your whole business:
- Whatnot. For 2025, Whatnot issued 1099-Ks through Stripe to sellers who cashed out with Stripe and met a federal or state threshold. Seller Hub shows your status under Finances, then Tax Documents.
- PayPal and Venmo. Whatnot’s help page notes that a PayPal 1099-K can cover Whatnot cash-outs plus other PayPal and Venmo payments, so a seller who also takes goods-and-services payments for show deals can cross the line on that form alone.
- eBay. The eBay tax form follows the same federal test. Selling $15,000 of cards in 300 orders gets no federal form, because only one of the two conditions is met.
A seller with $14,000 on Whatnot and $9,000 on eBay has $23,000 of sales and no federal 1099-K at all. The income is reportable anyway.
State 1099-K thresholds
Some states require forms below the federal line. The source column matters: several thresholds that circulate online rest on payment processor documentation rather than state law.
| State | Threshold | Source | Notes |
|---|---|---|---|
| Massachusetts | $600 or more, any number of transactions | State regulation (830 CMR 62C.8.1) | Quote seen through a search excerpt of mass.gov; direct fetch was blocked |
| Illinois | More than $1,000 and 4 or more transactions | State publication (Pub 110, R-01/26) | Both conditions |
| Vermont | $600 for 2025; $2,000 for 2026 | State statute and Department of Taxes FAQ | Tied to the federal 1099-MISC figure, which OBBB raised to $2,000 for 2026 |
| Maryland | $600 for 2025; $2,000 for 2026 (derived) | State statute (Tax-General 10-825) | Same peg; the Comptroller has not confirmed $2,000 |
| Virginia | $600 for 2025; $2,000 for 2026 (derived) | State tax bulletin 20-10 | Same peg; Virginia Tax still says $600 |
| District of Columbia | $600 | Payment processor docs only | No DC 1099-K rule found |
| Montana | $600 | Payment processor docs only | Only a 2021 bill draft found |
| New Jersey | $1,000 | Payment processor docs only | Only a general 1099 filing rule found |
Arkansas is sometimes listed at $2,500. The state’s own e-file specification makes $2,500 a general filing threshold for 1099s that are already required federally, not a lower 1099-K trigger, so in practice it adds nothing below $20,000 and 200.
Any lists that put California, Missouri, North Carolina or Mississippi below the federal line were contradicted by processor documentation, and we left them out.
Box 1a is gross, not profit
The IRS instructions define the gross amount as the total of reportable payments “without regard to any adjustments for credits, cash equivalents, discount amounts, fees, refunded amounts, shipping amounts, or any other amounts.” The taxpayer page adds that the gross “does not account for the original purchase price, or basis, of any items sold.”
One gap: the IRS guidance does not say whether sales tax a marketplace collects is inside Box 1a. Compare the form to your own order exports to find out for each platform.
Worked example: reconciling a 1099-K
A seller receives one 1099-K showing $24,600.00 in Box 1a for 412 transactions. Both federal conditions are met. Their ledger shows:
| Step | Amount | Running total |
|---|---|---|
| Box 1a gross | $24,600.00 | $24,600.00 |
| Less refunds paid back to buyers | −$380.00 | $24,220.00 |
| Less sales tax collected and remitted by the platform, found inside the gross | −$1,520.00 | $22,700.00 |
| Less platform fees (commission, processing, per-order fees) | −$2,840.00 | $19,860.00 |
| Less postage the seller paid | −$1,610.00 | $18,250.00 |
| Less cost of cards sold (singles, slabs, break spots) | −$13,400.00 | $4,850.00 |
| Profit | $4,850.00 |
The return shows the full $24,600 of gross receipts, and the subtractions bring it down to $4,850 of profit. Leaving the gross off because “it was mostly my own money back” is the mismatch that creates IRS letters. The sales tax line only belongs there if your exports show the tax inside the reported figure.
The Tax tab in Pullsheet builds this reconciliation from your imported orders.
Personal items sold at a loss
Selling part of a personal collection for less than you paid is common after a market drop. The IRS says a loss on a personal item can’t be deducted, but you can zero out the reported gross so you are not taxed on it. For 2024 and later, report the payment in the entry space at the top of Schedule 1 (Form 1040), or report the sale on Form 8949. Gains and losses go separately, and a loss on one item cannot offset a gain on another. The IRS example: tickets bought for $250 and sold for $200 are a $50 loss reported by including $200 at the top of Schedule 1.
If you buy cards to resell, they are inventory rather than personal items. See hobby vs business for card sellers and Whatnot taxes, and allocate break costs with the card break cost basis guide.
This guide explains the reporting rules; it is not tax advice, so confirm your situation with a tax professional.