The One Big Beautiful Bill Act (OBBBA) has made a plethora of changes to the tax law. One of these changes involves how we report income received on forms 1099-K, 1099-NEC, and 1099-MISC. As for form 1099-K, the OBBBA has reverted the reporting threshold back to $20,000 and 200 transactions. Prior to the OBBBA, The American Rescue Plan Act (ARPA) had dropped this threshold to $600 and unlimited transactions. These changes implemented by the OBBBA are in effect for all payments made after 12/31/2024. In a similar manner the OBBBA has also increased the threshold for reporting 1099-NEC and 1099-MISC forms from $600 to $2000, with annual inflation adjustments starting in 2027. This $2000 reporting threshold will be effective for payments starting 1/1/2026.
If you are someone who receives one of these forms you may ask yourself why these changes were made and how will they impact me? The OBBBA’s purpose for these changes is to help relieve the burden that businesses face by decreasing the number of 1099 forms that are issued, while also decreasing the number of forms that the taxpayer must keep track of and file. In essences, these changes are intended to help simplify and eliminate confusion that may occur when it comes time to file your taxes.
