IRS Delays Newly Enacted Filing Requirements for Side Hustles of More Than $600

The one-year delay helps the workers in the “Gig Economy” with side hustles temporary relief from additional requirements

In a rare postponing of the trend for increased reporting requirements forced by the federal government, the Internal Revenue Service (IRS) has announced a one-year delay to a law requiring e-commerce platforms such as eBay, Etsy and Airbnb to provide the agency with information on users with more than $600 in revenue. The delay means that platform sellers and the IRS will not receive a large number of 1099-K tax forms in early 2023 for their 2022 sales. This change offers relief to taxpayers and tax preparers who had been expecting a complicated tax-filing season, and also gives opponents of the $600 threshold more time to push for a change in the law next year. The current threshold for Form 1099-K reports was set at $600 as part of the American Rescue Plan Act in March 2021 and was due to take effect for the 2022 tax year. Prior to this change, platforms were required to report users’ income to the IRS if they had more than 200 transactions and $20,000 of revenue. The lower threshold was introduced in an attempt to increase tax compliance in an area where it is often lacking, namely unreported business income. The provision was expected to raise $8.4 billion over a decade, according to the congressional Joint Committee on Taxation.