With reporting thresholds raised, the Illinois CPA Society shares insight into what to do if you receive this IRS form.

CHICAGO, Feb. 17, 2026 – Tax season is in full swing, and tax forms are now flooding into taxpayers’ mailboxes, including 1099-Ks. After a couple years of uncertainty and lowering reporting thresholds, the 1099-K rules are set, and the reporting thresholds are returned to elevated levels. If you earn income or receive payments via third-party settlement organizations (TPSOs)—think popular payment apps and marketplaces like Cash App, eBay, Etsy, PayPal, and Venmo, among others—for the payment of “goods or services,” you may receive Form 1099-K this year. Here’s what to know.

For the 2025 tax year, you should technically only receive a 1099-K if you received more than $20,000 in gross payments and conducted more than 200 transactions on a single platform during the 2025 calendar year. For most people paid via third-party processing platforms, this means no unexpected or confusing 1099-K tax paperwork triggered by an occasional online sale or side hustle. However, some organizations, like eBay, may still issue a 1099-K even if your activity was below was below the reporting threshold.

So, what if you receive a 1099-K? Ignoring it isn’t an option.

What is a 1099-K?

Form 1099-K is an information return, meaning the income reported on the form is provided to both taxpayers and the IRS, and failing to properly report the income could trigger an IRS notice or audit.

Taxpayers must also be mindful that a 1099-K will be issued by each TPSO when required for the tax year.

Importantly, taxpayers are responsible for reporting all the income included on all 1099-Ks received. However, just because income is reported on a 1099-K doesn’t mean it’s taxable income. In fact, Form 1099-K doesn’t distinguish between how much, if any, of the income reported is taxable. That’s why good recordkeeping of payments received throughout the year is so important.

Did you sell personal items?

If you sold personal items on eBay for less than you paid for them, for example, that income isn’t taxable. While the loss on the sale of a personal item can’t be deducted from your taxable income, you can zero out the gross income reported on the 1099-K for that sale so you don’t pay taxes on it. On the other hand, if you sell personal items for a gain, meaning more than what you originally purchased them for, the gain (less expenses) is considered taxable income.

Did you sell goods or provide services?

If you sell goods on eBay or Etsy, for instance, or provide services you’re paid for as part of a personal business, side hustle, gig work, or contract or freelance employment, the income reported on your 1099-K is taxable. However, you may deduct the expenses related to the sale of the goods or services from the gross income reported on the 1099-K to lower the amount of taxable income.

All in all, the likelihood and frequency of receiving a 1099-K should decrease now that the reporting threshold has been elevated to $20,000 and 200 or more transactions. However, savvy taxpayers should stay mindful of what to do if a 1099-K is received. Most tax forms will be delivered by the end of February, although some may arrive later. It’s also always smart to check each form for any errors or inconsistencies before filing.

Do you need extra time to file?

The deadline for filing individual tax returns is April 15, 2026, which is also the deadline for requesting a six-month filing extension. Remember, however, an extension only provides additional time to file a return, and any anticipated tax payments are still due on April 15. The IRS urges taxpayers to electronically file their tax returns and choose direct deposit for receiving any refunds to speed up processing and enhance security.

While the IRS provides guidance on what to do with a 1099-K, filing federal and state tax returns can still be complicated. The Illinois CPA Society (ICPAS) reminds taxpayers that CPAs, certified public accountants, are ready to help. ICPAS’ free “Find a CPA” directory can help you find the trusted, strategic advisor that’s right for you based on location, types of services needed, and languages spoken. Find your CPA at www.icpas.org/findacpa.