Money sent through a payment app as a gift, or to pay back a share of the rent or a dinner bill, is not income, and the IRS says it is not reportable on Form 1099-K. If a payment app or online marketplace sends a 1099-K that lists those payments anyway, the person who got it has to ask the company that issued the form for a corrected one, because the IRS cannot fix it.

The form itself is filed only when payments to a seller pass $20,000 and more than 200 transactions. The IRS says the One, Big, Beautiful Bill retroactively reinstated that threshold, which replaced the $600 reporting rule that had been scheduled under an earlier law. The rules for what a form shows and what counts as income did not change.

Anyone who receives a 1099-K, or expects none, faces two separate questions: is the money income, and is the form right. The form answers neither one. The IRS’s questions-and-answers page, last reviewed June 27, 2026, says a payment on a 1099-K is not necessarily taxable, and “just because a payment is not reported on a Form 1099-K does not mean it is not taxable.”

Gifts and shared costs are not payments for goods or services

The IRS draws the line at what the payment was for. Gifts and reimbursements for shared costs are not payments for goods or services, so they are not reportable on Form 1099-K. A person who sends a friend money for a birthday, or repays a roommate for a share of the utilities, has not paid for anything that a form should track.

The IRS gives its own example. A roommate’s $11,000 rent reimbursement shows up on a 1099-K in error, and the page says it is not taxable income. Anyone in the same spot still has to deal with the form, because the number on it will not match what belongs on the return.

Money earned for goods or services is a different matter. The IRS says business income, such as payments for rideshare driving, may be reported on Schedule C. That holds whether or not a 1099-K ever arrives.

A wrong form goes back to the company that sent it

The IRS tells people who get an incorrect 1099-K to contact the filer, whose name is in the upper left corner, or the payment settlement entity, named in the lower left corner, and ask for a corrected form. The IRS says not to contact the agency about it, because it cannot correct the form.

If a corrected form does not arrive in time, the IRS says not to wait to file. The error is reported on Schedule 1 of the Form 1040. The wrongly reported amount goes on line 8z, for other income, and the same amount goes on line 24z, for other adjustments, so the two net to zero effect on adjusted gross income.

What the $20,000 and 200 transactions rule does and does not do

The IRS’s Oct. 23, 2025 release, IR-2025-107, says third-party settlement organizations must file only when payments to a payee exceed $20,000 gross and the number of transactions exceeds 200. Before the change, the American Rescue Plan Act of 2021 had set a $600 trigger no matter how many transactions there were.

The companion Fact Sheet 2025-08 adds that a settlement organization is not penalized for skipping a form below those levels, but it may still send one. States may also set lower thresholds. Payment card transactions are different: the fact sheet says no de minimis exception applies, so all reportable card transactions must be reported.

The IRS’s 1099-K questions-and-answers page now states the threshold as more than $20,000 in gross payments and more than 200 transactions, and it no longer mentions a $600 threshold. A seller who crosses only one of the two numbers is below the filing line.

When a form is due, payee statements go out by Jan. 31 of the following year, and the filer sends forms to the IRS by Feb. 28 on paper or March 31 electronically. Payees cannot be charged for the cost of filing or furnishing the forms. The fact sheet and the IRS release do not name specific calendar years for the reinstated threshold.

Selling personal items for less than they cost

A 1099-K can also list money from selling a used household item. The IRS says a loss on selling a personal item is not deductible, and a gain on one is taxable and goes on Form 8949 and Schedule D. For 2022 and 2023 returns, the page says to report the proceeds and the matching cost on Schedule 1, each labeled “Form 1099-K Personal Item Sold at a Loss.”

Anyone who sells a lot of used items, or who is paid for work through an app, can do the sorting before January: which deposits were gifts, which were repayments, and which were earnings. The IRS page treats that sorting as the taxpayer’s job, because the form is not what decides whether the money is taxable.

This article was produced with AI assistance and edited for accuracy against the sources linked above.