On December 23, 2022, the Internal Revenue Service (IRS) announced that a third-party settlement organization (TPSO) will not be penalized for failing to file, or failing to furnish, Forms 1099-K that exceed a minimum threshold of $600 in aggregate payments, irrespective of the number of transactions for the 2022 tax year. The calendar year 2022 will be considered a transition period for the implementation of the $600 threshold. The change of the rules is in response to raised concerns over the implementation timeline for TPSOs.
One caveat to this change is that a Form 1099-K must still be filed with the IRS and furnished to the recipient if backup withholding was performed in the calendar year for payees with “total payments to and withholding” exceeding $600 in the 2022 calendar year.
Review the IRS announcement and Notice 2023-10 for more details: