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IRS Delays Implementation of New $600 Reporting Threshold for Digital Payment Platforms

The move, aimed at reducing taxpayer confusion, will see the current threshold of over $20,000 and more than 200 transactions remain in place for 2023, with a phased-in approach planned for the following years.

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Overview

  • The IRS has delayed the implementation of a new policy that would require digital payment platforms to report transactions over $600 to the IRS.
  • The new reporting requirement, part of the 2021 American Rescue Plan, has been postponed due to concerns about taxpayer confusion and the need for additional time to effectively implement the changes.
  • For tax year 2023, the current threshold of over $20,000 and more than 200 transactions will remain in place.
  • In 2024, the IRS plans to increase the reporting threshold from $600 to $5,000 as part of a phase-in approach.
  • The $600 threshold is expected to be implemented in tax year 2025.