The IRS posted a draft of the 2025 Form 1099K along with FAQs. The tax agency also announced that it is continuing to accept payments from taxpayers – but will not issue refunds – during the ongoing government shutdown, which began on October 1, 2025.
Congress passed a law on July 4, 2025, raising the 1099K threshold back to its original $20,000 and 200 transactions, and the draft Form 1099K is available on this page of the IRS.gov website. It also published a release last week about the changes to the form, and linked to a fact sheet that provided FAQs and the following background information:
“Form 1099-K is an IRS information return used to report certain payments to improve voluntary tax compliance. The requirement to file a Form 1099-K can be triggered when payments are received for goods or services through a payment settlement entity (PSE). The One, Big, Beautiful Bill (OBBB) retroactively reinstated the reporting threshold in effect prior to the passage of the American Rescue Plan Act of 2021 (ARPA) so that a third party settlement organization (TPSO) is not required to file a Form 1099-K unless the gross amount of reportable payment transactions to a payee exceeds $20,000 and the number of transactions exceeds 200. Under the ARPA reporting threshold, TPSOs, which are a type of PSE, were required to file Form 1099-K for any payee that received more than $600 in total payments for the sales of goods or services, regardless of the number of transactions. Subsequently, Notices 2023-10, 2023-74 and 2024-85 were issued to provide transition periods and penalty relief for the implementation and enforcement of the ARPA changes to the reporting threshold for TPSOs.”
The backgrounder also advised readers, “Your state may have a lower reporting threshold for TPSOs, which could result in you receiving a Form 1099-K, even if the total gross payments and transactions did not exceed the federal reporting threshold.”
The IRS also issued an advisory this week on its operations during the government shutdown or, to use its language, “during the lapse in appropriations,” stating it will accept and process any payments and remittances received, whether received electronically or by mail.
However, the IRS said it generally will not pay refunds during shutdowns, with one key exception: the IRS will continue to pay individual refunds for those who requested direct deposit on their Forms 1040 if they electronically filed the tax returns, the returns are error-free, and the returns can be automatically processed
Getting customer service will be difficult. Only limited live IRS telephone customer service assistance is available (most automated toll-free telephone applications remain operational), and the IRS’s walk-in Taxpayer Assistance Centers (TACs) are closed.
Enforcement activity continues, including criminal investigation work, and the IRS Income Verification Express Service (IVES) remains available.
The IRS said it would continue some critical operations to be ready for tax professionals and their clients including the testing and preparation of filing season programs and related issues.
