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IRS report: $600 CashApp, PayPal transactions

Electronic payment services like CashApp or Pay{al will now need to report transactions over $600 to the IRS under new rules.

paypal app on cellphone for people to make transactions and report to the IRS

This includes Venmo, PayPal, Zelle, and Cash App.

From Jan. 1 on those services must report commercial transactions worth $600 or more.

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Related: Bank, Venmo, CashApp transactions reported to IRS for 2022

This will require taxpayers to use a 1099-K form whenever a person makes over $600 per year in commercial payments.

The IRS said this is a law under the American Rescue Plan. After COVID-19, the American Rescue Plan was created as a response.

The former rules were that the payment companies needed to report over 200 commercial transactions to the IRS, or a total exceeding $20,000 in one year.

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Related: People who make an income using sites like Etsy and eBay will now need to pay taxes for making over $600

What about paying friends and family?

PayPal and Venmo both offer ways to choose peer-to-peer transactions for goods and services.

Choose Goods and Services. This includes paying for dinner with friends or for things off Craigslist.

By choosing this, it signifies that it isn’t a small business transaction requiring reporting to the IRS.

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