IRS delays enforcement of law requiring reporting of gig income over $600

It is learned that recently, the U.S. Internal Revenue Service (IRS) announced that it would postpone the implementation of new tax filing regulations, providing a one-year buffer period for sellers on e-commerce platforms such as eBay, Etsy and Airbnb, as well as other Americans who meet the requirements.

The new tax reporting regulations require that if sellers receive more than $600 in compensation for goods and services through platforms such as Etsy, eBay and Airbnb, they will need to fill out and submit a 1099-K tax form for reporting. Previously, the threshold was $20,000.

The requirement, included in the 2021 American Rescue Plan Act, has drawn criticism for placing a burden on day workers who sell used items on eBay to supplement their low incomes and support themselves.

Following concerns from some lawmakers, the electronic transaction industry, and the tax community, the IRS delayed enforcement of this requirement until the spring of 2024. The additional time will help reduce confusion during the upcoming 2023 tax season and provide taxpayers with more time to prepare for and understand the new tax filing requirements.

While the bill does not affect personal transactions, such as reimbursing friends and family for theater, meals or household bills, critics say the IRS could send people forms for payments that don't qualify to be taxed.

To allay some concerns, some House Democrats introduced legislation earlier this year to raise the threshold to $5,000. A bipartisan attempt by Republican and Democratic senators earlier this year to raise the threshold further to $10,000 failed.

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