If the last thing you read about the 1099-K threshold said $2,500, or $5,000, or anything trending toward $600, that information is no longer current. A law signed in July 2025 reversed the multi-year phase-down entirely, retroactively, and the number that actually governs 2026 is $20,000 in gross payments AND more than 200 transactions — both conditions required, not either one.
This isn't a minor correction. It's a full reversal of a rule that had been dropping every year since 2023, and a lot of what's still circulating online (including tax content written earlier this year) reflects the old phase-down schedule rather than the law as it now stands.
How the threshold actually moved
The American Rescue Plan Act of 2021 set up a phase-down from the original $20,000/200-transaction rule toward a flat $600, with the IRS delaying and adjusting the glide path several times:
- 2023 and earlier: $20,000 and 200 transactions
- 2024: $5,000, no transaction count
- 2025 (as originally scheduled): $2,500, no transaction count
- 2026 (as originally scheduled): heading toward $600
Then the One Big Beautiful Bill Act, signed July 4, 2025, repealed the ARPA phase-down outright and restored the pre-2021 rule — $20,000 and more than 200 transactions, both conditions required. The IRS confirmed this in Fact Sheet 2025-08 on October 23, 2025, updating its official 1099-K FAQ to match. Unlike the ARPA schedule, this restored threshold isn't a temporary step: it's written back into the statute (IRC §6050W) with no scheduled phase-down and no sunset date.
It's retroactive to 2025, and nobody has to fix what already went out
The reversal applies to tax years beginning after December 31, 2021 — which means it technically covers 2025 as well as 2026. Practically, the IRS addressed the awkward part directly: platforms that already issued 1099-Ks under the lower, now-superseded thresholds don't have to amend them, and platforms that didn't file under the ARPA rules face no penalty for not having done so. If you got a 1099-K for 2024 or 2025 under a lower threshold, it isn't wrong and won't be corrected — the reversal just means fewer of those forms go out from here on.
eBay's own guidance for sellers reflects the restored rule directly: both conditions have to be crossed in the same calendar year. $25,000 in sales on 150 orders doesn't trigger a form. 210 orders totaling $9,000 doesn't either. Only crossing both lines does.
State thresholds didn't move — they were never tied to the federal number
This is the part that trips up sellers who assume "the threshold" is one national number. Several states set their own, lower 1099-K reporting requirements independent of federal law, and the OBBBA reversal has no effect on them:
- **Massachusetts, Maryland, Vermont, Virginia, and the District of
- Columbia currently require reporting at $600**, regardless of the
- federal $20,000/200-transaction rule.
If you live in one of those states, a $700 year of eBay sales still gets you a 1099-K, federal reversal or not — because it was never the federal rule generating that form in the first place.
The number on the form was never the number that matters
Whichever threshold applies to you, this hasn't changed and won't: getting a 1099-K doesn't create tax liability, and not getting one doesn't remove it. The form is an information-reporting trigger, not a determination of what you owe. A reseller doing $14,000 a year on 180 orders won't get a federal 1099-K under the restored rule — and still owes tax on every dollar of profit, exactly as before. The IRS's own guidance says this plainly: reporting thresholds govern paperwork, not taxability.
That's the trap the last three years of threshold whiplash set for a lot of sellers — treating "no 1099-K" as "no need to report." It was false under $600, it was false under $2,500, and it's still false under $20,000. The only thing that changes with your own threshold is whether the IRS gets a copy of your gross numbers from the platform directly, or has to rely on you reporting them without a form to cross-check against.
What to actually do
- Don't plan around a specific dollar figure from an older article —
- this one included, a year from now. Check the current-year IRS 1099-K
- FAQ page before filing.
- Keep your own sales log regardless of whether a form shows up. A
- reseller under $20,000 a year now has one less form doing that job for
- them, not one less obligation.
- **If you're near a state threshold, expect a form even if you're
- nowhere near the federal one.** Check your state's rule specifically
- rather than assuming the federal number is the only one in play.
- **Don't assume a 1099-K you received in an earlier year under a lower
- threshold was a mistake.** The IRS explicitly said those don't get
- unwound.
PalmFlow logs cost basis, fees, and profit on every sale as it happens, independent of which year's reporting threshold applies to your account — so your own records don't depend on whether a form arrives in January. Free plan, 50 items, no card required.
Disclaimer: this is not tax advice. Reporting thresholds are set by federal and state law and can change again; confirm the current-year number with the IRS and your state's tax authority, or a CPA, before filing.