Do I have to pay taxes on Venmo, Cash App or PayPal transactions?
(NewsNation) — If you use payment apps like Venmo, Cash App or PayPal for more than just splitting a bill, there could be some important filing documents coming your way this tax season.
A rule established in 2023 requires third-party payment apps to send you a 1099-K tax form if you meet a certain monetary threshold of business payments.
After multiple delays in implementing the threshold, the magic number for the 2024 tax year is $5,000.
Starting in the 2025 tax year, anyone earning more than $2,500 will be sent a 1099-K. The threshold will once again lower in the 2026 tax year with anyone who hits $600 receiving a form.
What is a 1099-K tax form? Who gets one?
Typically, freelancers or self-employed workers receive a 1099-K tax form.
The form is used to report payment transactions for retailers or other third-party transactions, according to the Internal Revenue Service's government website.
You'll receive a 1099-K if:
- Customers pay you directly by credit, debit or gift card
- You use a payment app or online marketplace, including auction sites and crowdfunding platforms
Certain states have lower thresholds than others, so keep that in mind when checking for eligibility.
- Illinois: more than $1,000 and four or more separate transactions
- Maryland: at least $600
- Massachusetts: at least $600
- Vermont: at least $600
- Virginia: at least $600
If you're handling transactions on more than one platform or payment app, you'll likely receive multiple 1099-K forms.
It's best practice not to mark Venmo, Cash App or PayPal payments between friends and family as business transactions — and don't note them on your 1099-K form when filing.
Do Venmo, Cash App and PayPal need my tax details?
If you're trading goods and services for payment on any transaction app, you'll typically have to provide your Social Security number and tax identification number.
Here's how each app handles 1099-K forms:
- Venmo and PayPal: You'll get a form if your threshold-breaking payments are marked as "goods and services."
- Cash App: If you have a personal, not business, account — don't expect a form, regardless of your transaction history.
- Zelle: No form, as the app does not report any transactions to the IRS.
1099-K tax form download
The IRS provides a PDF version of the 1099-K as well as instructions for filling it out.
Other 1099 forms include the 1099-G for government payments such as unemployment benefits, a 1099-NEC for contractor or freelance work and a SSA-1099 for Social Security benefits.