Current Form 1099-K Reporting Thresholds 2025 Update
Tax laws can change from year to year, and you shouldn’t have to be a tax expert to understand IRS requirements that may impact you. That’s where PayPal comes in! As a payment settlement entity, PayPal is required to report payment activity and provide tax documents in certain situations. Read on to learn about this year’s reporting requirements.
What is the 2025 Form 1099-K IRS tax reporting threshold on PayPal?
The One Big Beautiful Bill Act of 2025 restored the previous federal reporting threshold for Form 1099-K. This means you’ll get a 1099-K if you receive more than $20,000 and 200 transactions for goods and services in a calendar year.
Additionally, PayPal and Venmo will issue and file Form 1099-K for any customer who was subject to backup withholding during 2025, regardless of total payments for the year. In the case where an individual state has a lower threshold, PayPal and Venmo will report accordingly.
If you live in the following US states,* you’re subject to a lower reporting threshold:
- Vermont, Massachusetts, Virginia, Maryland: $600 USD in gross payment volume from sales of goods or services in a single calendar year, regardless of the number of transactions.
- Illinois: over $1,000 USD in gross payment volume from sales of goods or services in a single calendar year and four or more separate transactions.
The Form 1099-K that you receive is based on your primary address on the last day of the previous tax year. If you changed your primary address to one of these states after that date, your account activity will be captured in Form 1099-K reporting for the following tax year.
If you accept payment for goods and services in crypto assets such as PYUSD and meet the reporting threshold, you’ll receive a separate 1099-K reporting those transactions.
PayPal doesn’t provide tax advice. For questions regarding your specific circumstances, you should consult your tax adviser.
* Please note that state revenue/tax agencies may still be in the process of updating their reporting requirements for the current tax year. This information is subject to change and will be updated as needed.
What if PayPal already sent some of my money to the IRS because of backup withholding?
PayPal withheld money from certain accounts that were missing tax information at a rate of 24 percent, as required by the IRS. We will issue customers a Form 1099-K and they will be able to claim a credit or refund of the backup withholding when they file their own taxes with the IRS. For more information, visit the IRS Backup Withholding page or Small business and self-employed Backup Withholding page.
More info about tax reporting:
What if the amount reported on my Form 1099-K is incorrect?
How do I find, download or request a correction to my 1099?
How do I view and download statements and reports?
Why did my US Tax Identification Number (TIN) fail verification?
New U.S. Tax Reporting Requirements: Your Questions Answered