Notice 2024-85 provides that calendar years 2024 and 2025 will be regarded as the final transition period for purposes of IRS enforcement and administration of the minimum reporting threshold for Form 1099-K, Payment Card and Third-Party Network Transactions.
Under Notice 2024-85, a third-party settlement organization (TPSO) will be required to report payments in settlement of third-party network transactions with respect to a participating payee when the amount of total payments for those transactions is more than $5,000 during calendar year 2024; more than $2,500 during calendar year 2025; and more than $600 during calendar year 2026 and after. These reporting amounts are regardless of the number of transactions, so even one transaction more than $5,000 would require reporting for 2024.
Notice 2024-85 also provides that for calendar year 2024, the IRS will not assert penalties under section 6651 or 6656 for a TPSO’s failure to withhold and pay backup withholding tax during the calendar year.
