For Tax Year 2026 returns filed in 2027, preparers should understand the updated reporting rule for payment card and third-party network transactions. Form 1099-K reporting affects taxpayers who receive payments through platforms, apps, and online marketplaces.
The law reinstates the exception for third-party network transactions when the taxpayer has 200 or fewer transactions and total payments do not exceed $20,000. This moves Form 1099-K reporting away from the lower $600 threshold for many third-party network payments.
A Form 1099-K is an information return, not a tax calculation. The amount reported may include gross receipts before fees, refunds, chargebacks, or personal transfers. Preparers should use client books and records to determine the correct taxable income.
Do not tell a client that income is not taxable simply because no Form 1099-K was received. Taxable income must still be reported even when an information return is not issued.