Form 1099-K Threshold Returns to $20,000 and 200 Transactions

On October 23, 2025, the Internal Revenue Service (IRS) published news release IR-2025-107 and fact sheet FS-2025-08 on Form 1099-K. This form is issued by platforms that process payments for you (third party settlement organizations), such as payment apps and online marketplaces, and by card processors.

The news: the 2025 federal law known as the One, Big, Beautiful Bill retroactively restored the threshold that existed before the American Rescue Plan Act of 2021 (ARPA).

The threshold that applies

A third-party payment platform does not have to issue Form 1099-K unless, during the year, the payments it processed for you:

• add up to more than $20,000, and
• are more than 200 transactions.

Both conditions must be met. Before the law, the IRS had announced a transition to much lower thresholds. For example, it had planned $5,000 for 2024. With the law, that reduction no longer applies.

The income is taxable just the same

The IRS is clear: all income, regardless of the amount, is taxable unless the law says otherwise, even if you do not receive a Form 1099-K. Not getting the form anymore does not mean those sales stop being income.

What it means in Puerto Rico

If you are a bona fide resident of Puerto Rico, most of your Puerto Rico-source income is not taxed by the IRS, but you do have to report it to the Departamento de Hacienda (Puerto Rico's Treasury Department, "Hacienda"). See Puerto Rico residents and the IRS. Even so, Form 1099-K can affect you in two ways:

• Federal Social Security. If you are self-employed and your net self-employment income is $400 or more, you must file Form 1040-SS with the IRS to pay Social Security and Medicare tax. That income includes sales you collected through platforms or cards, with or without a Form 1099-K. Read about self-employment tax or make an estimate with the calculator.
• Your Hacienda return. Your business sales are reported on your income tax return (planilla, Form 482) even if you do not receive an informative return. If you are a merchant, you also have to collect and send in any IVU (sales and use tax) that applies. See self-employed workers and our IVU guide.

What to do now

1. Keep your own records of sales, expenses and payments received through each app or payment processor. Do not rely on receiving a form.
2. Separate your personal and business accounts, so payments from family and friends do not get mixed in with your sales.
3. Compare any Form 1099-K you receive with your records. If a figure does not match, contact whoever issued the form.

787TAX is an independent guide. It is not Puerto Rico's Departamento de Hacienda, the CRIM or the IRS. This page is general information, not tax or legal advice. Example figures are hypothetical. Found an error? Tell us.