1099-K Threshold Explained for Resellers (Updated 2026)
The 1099-K reporting rules have been a moving target. Here is exactly where things stand for tax years 2025 and 2026, and what it means for your reselling business.
Last verified: January 2026. Source: IRS Notice 2024-85 and subsequent guidance.
Current federal threshold (2025-2026)
For tax years 2025 and 2026, the federal 1099-K reporting threshold remains at:
- $20,000 in gross payments, AND
- 200 transactions
You must meet both criteria before a payment processor (eBay, Poshmark, Mercari, PayPal, etc.) is required to file a 1099-K with the IRS for your account.
What happened to the $600 threshold?
The American Rescue Plan Act of 2021 lowered the threshold to $600 with no transaction minimum. However, the IRS has repeatedly delayed implementation:
- 2022-2023: IRS delayed to provide a "transition period"
- 2024: Phased approach announced ($5,000 threshold)
- 2025-2026: Congress maintained the $20,000/200 threshold through legislation
As of January 2026, the $600 threshold has not taken effect. Check IRS.gov for the latest updates, as this could change with future legislation.
State thresholds matter
Several states have their own 1099-K reporting rules that arelowerthan the federal threshold. If you live in one of these states, you may receive a 1099-K even if you're under $20,000:
| State | Threshold | Transactions |
|---|---|---|
| Massachusetts | $600 | 1 |
| Vermont | $600 | 1 |
| Maryland | $600 | 1 |
| Virginia | $600 | 1 |
| Illinois | $1,000 | 4 |
Getting a 1099-K doesn't mean you owe all that in taxes
This is the most common misconception. The 1099-K reports gross payments -- the total amount buyers paid you. It does not account for:
- Your cost of goods (what you paid for the items)
- Platform fees (eBay's ~13%, Poshmark's 20%, etc.)
- Shipping costs
- Supplies, mileage, and other business expenses
Your actual taxable income is your net profit: gross sales minus all legitimate business expenses. That's why tracking per-item costs is critical.
How to reconcile your 1099-K
When you file your taxes, you need to show the IRS that the gross amount on your 1099-K breaks down into:
- Gross receipts (Schedule C, Line 1)
- Minus: cost of goods sold (Line 4)
- Minus: business expenses (Lines 8-27)
- Equals: net profit (or loss)
Soldbook generates this reconciliation automatically. Import your sales data, match items to costs, and download a Tax-Ready Report that maps directly to Schedule C.
Reconcile your 1099-K in minutes, not hours.
Try Soldbook freeInformational only — not tax advice.