IRS delays new tax reporting requirement for Venmo, Cash App users

The Inner Income Service (IRS) introduced on Friday that it’s going to delay the rollout of a brand new rule that was set to decrease the tax reporting threshold for transactions companies make via third-party cost platforms like Venmo and Money App. 

The IRS stated in a launch that it selected to delay the reducing of the brink to $600 following considerations that the company and the Treasury Division acquired concerning the timeline. 

The American Rescue Plan, the $1.9 trillion COVID-19 stimulus bundle that Congress handed final 12 months, features a provision to require sellers to report if their transactions over these third-party networks exceed $600 in combination in a 12 months, a big drop from the earlier threshold of greater than 200 transactions exceeding $20,000 in a 12 months. 

The supply was set to enter impact on Jan. 1, 2023, however the IRS stated it’s going to delay the implementation and that calendar 12 months 2022 can be a “transition interval” for the change. 

“The extra time will assist scale back confusion throughout the upcoming 2023 tax submitting season and supply extra time for taxpayers to arrange and perceive the brand new reporting necessities,” stated appearing IRS Commissioner Doug O’Donnell. 

The discharge states that implementation of the brand new threshold can be delayed to transactions that happen after 2022. The delay is meant to facilitate an “orderly transition” for compliance from the third-party organizations and people, the company stated.

The IRS famous that the regulation doesn’t have an effect on private transactions for people sharing the price of a experience, a meal, a present or a family invoice. 

It stated the company acknowledges it should handle the coverage rigorously to make sure 1099-Ks, the shape used to report the enterprise transactions, are solely despatched to taxpayers who ought to obtain them. It stated extra particulars on the delay and knowledge to assist taxpayers can be accessible within the close to future.