Policies & IssuesFeb 01, 2022
OSHA Withdraws ‘Vaccine or Testing’ MandatePolicies & IssuesFeb 02, 2022
Jewelers Using Payment Apps Should Know This New Tax Rule
For tax year 2022, the IRS has substantially lowered the threshold for receiving a 1099-K for business transactions made via payment apps.
A new tax reporting rule requires payment app providers to issue a 1099-K if business transactions total more than $600 per year.
New York—Jewelers, designers and service providers using payment apps like Venmo or PayPal should make note of a recent change to a tax reporting rule.
A new IRS tax reporting rule, effective as of Jan. 1, requires payment app providers to issue users and the IRS a form 1099-K if the user’s business transactions total more than $600 per year.
Previously, payment app providers would need to send a 1099-K only if a user had more than 200 business transactions in a year that totaled at least $20,000.
A business transaction means any payment, including tips, for goods and services.
The rule applies to purchases made via a payment app both in store and online, like through Instagram, eBay, Etsy, or any other selling platform.
The rule does not apply to personal transactions, like splitting dinner with a friend or sending birthday money.
App users won’t pay any additional taxes for purchasing goods or services.
Related stories will be right here …
A new IRS tax reporting rule, effective as of Jan. 1, requires payment app providers to issue users and the IRS a form 1099-K if the user’s business transactions total more than $600 per year.
Previously, payment app providers would need to send a 1099-K only if a user had more than 200 business transactions in a year that totaled at least $20,000.
A business transaction means any payment, including tips, for goods and services.
The rule applies to purchases made via a payment app both in store and online, like through Instagram, eBay, Etsy, or any other selling platform.
The rule does not apply to personal transactions, like splitting dinner with a friend or sending birthday money.
App users won’t pay any additional taxes for purchasing goods or services.
The change was signed into law last year as part of the American Rescue Plan, the $1.9 trillion stimulus bill passed, in part, to provide COVID-19 relief, but it also amended parts of the Internal Revenue Code.
The law will apply to tax year 2022, so those eligible for these 1099-Ks will receive them starting in 2023.
The reporting requirement is new, but the tax isn’t.
For this year, individuals are still required to report taxable income received through these platforms on their income tax return.
“Third-party information reporting has been shown to increase voluntary tax compliance and improve collections and assessments within [the] IRS,” said the agency in the FAQ section of its website about the change.
Payment providers like Cash App, PayPal, and Venmo have added updated guidance to their websites.
Payment app Venmo allows users to tag goods and services purchases in its app.
Venmo customers may receive an in-app notification or an email about confirming information for tax purposes.
For example, PayPal and its subsidiary Venmo offer an option for customers to tag their transactions as either a personal one or as a goods and services purchase.
Users are encouraged to select “goods and services” when they are sending someone money to purchase an item. Doing so also makes these transactions eligible for coverage under PayPal and Venmo’s purchase protection program.
In its FAQ section, Venmo noted that customers may receive an in-app notification or email asking them to confirm information they use when filing taxes, like a social security number and address.
Venmo noted that some amounts may be excluded from gross income, and therefore not subject to income tax, like if a user sells a personal item at a loss.
“We encourage customers to speak with a tax professional when reviewing their 1099-K forms to determine whether specific amounts are classified as taxable income,” said Venmo in a statement on its website.
Notably, payments for a good or service made via Zelle, which sends money between U.S. bank accounts, are not subject to this reporting rule.
Zelle would not need to provide a 1099-K because while it facilitates the sending of money between financial institutions, it doesn’t hold that money or participate in settling the funds.
The change to the reporting rule follows the announcement of a plan from the U.S. Treasury to close the “tax gap,” meaning the difference between what the government is owed and what it receives in taxes.
The American Families Plan Tax Compliance agenda, announced in May 2021, aims to raise an additional $700 billion over the next decade through new tax compliance measures.
“These unpaid taxes come at a cost to American households and compliant taxpayers as policymakers choose rising deficits, lower spending on necessary priorities, or further tax increases to compensate for the lost revenue,” said the department in its plan.
The treasury found the tax gap was nearly $600 billion in 2019.
“Working to close the tax gap reflects a commitment to ending our two-tiered tax system, one where most American workers pay their full obligations, but high earners who accrue income from opaque sources often do not,” said the treasury.
For more information about changes to tax reporting rules and the 1099-K form, visit the IRS website.
Users are encouraged to select “goods and services” when they are sending someone money to purchase an item. Doing so also makes these transactions eligible for coverage under PayPal and Venmo’s purchase protection program.
In its FAQ section, Venmo noted that customers may receive an in-app notification or email asking them to confirm information they use when filing taxes, like a social security number and address.
Venmo noted that some amounts may be excluded from gross income, and therefore not subject to income tax, like if a user sells a personal item at a loss.
“We encourage customers to speak with a tax professional when reviewing their 1099-K forms to determine whether specific amounts are classified as taxable income,” said Venmo in a statement on its website.
Notably, payments for a good or service made via Zelle, which sends money between U.S. bank accounts, are not subject to this reporting rule.
Zelle would not need to provide a 1099-K because while it facilitates the sending of money between financial institutions, it doesn’t hold that money or participate in settling the funds.
The change to the reporting rule follows the announcement of a plan from the U.S. Treasury to close the “tax gap,” meaning the difference between what the government is owed and what it receives in taxes.
The American Families Plan Tax Compliance agenda, announced in May 2021, aims to raise an additional $700 billion over the next decade through new tax compliance measures.
“These unpaid taxes come at a cost to American households and compliant taxpayers as policymakers choose rising deficits, lower spending on necessary priorities, or further tax increases to compensate for the lost revenue,” said the department in its plan.
The treasury found the tax gap was nearly $600 billion in 2019.
“Working to close the tax gap reflects a commitment to ending our two-tiered tax system, one where most American workers pay their full obligations, but high earners who accrue income from opaque sources often do not,” said the treasury.
For more information about changes to tax reporting rules and the 1099-K form, visit the IRS website.
Editors' Picks
Sponsored by
More on Policies & Issues
The Latest
SourcingJul 15, 2026
1,305-Carat Diamond Recovered from Mine in BotswanaThe yet-to-be named stone is the 10th diamond weighing more than 1,000 carats to come out of Lucara’s Karowe mine.
IndependentsJul 15, 2026
New Jersey Jeweler Barry Berman Dies at 81The founder of Fords Jewelers, Berman is remembered for his love of connecting with his community.
FinancialsJul 15, 2026
Watches of Switzerland’s US Sales Jump 18%, Declines to Comment on Sale Report The watch and jewelry retailer had a strong fiscal year despite what its CEO described as a “complex operating backdrop.”
Brought to you by
Wedding Band Trends 2026: Personalization Takes Center StageColored gemstones, artisan finishes, mixed metals, and meaningful details are shaping demand in bridal jewelry.
Events & AwardsJul 15, 2026
Hamptons Jewelry Show to Return in JulyThe open-to-the-public luxury jewelry and timepiece show, in its second year, is slated for July 23-26.
Weekly QuizJul 09, 2026
This Week’s QuizTest your jewelry news knowledge by answering these questions.
CollectionsJul 15, 2026
Pomellato’s New High Jewelry Is LiberatingBold color, expressive gem-setting, and sculptural form define the three chapters that make up “Stile Libero.”
IndependentsJul 14, 2026
Foundrae Opens First Standalone Store Outside USThe New York-based jewelry brand has expanded overseas, opening a store in London’s Mayfair district.
Brought to you by
Building the Future of Jewelry Retail: DCA Expands Education, Leadership Development, and Workforce SolutionsDCA is preparing the next generation of professionals by supporting workforce development, leadership growth, and career advancement.
ColumnistsJul 14, 2026
Sherry Smith: What Today’s Jewelry Consumer Is Telling Us Rising revenue does not automatically mean a healthy business, particularly in the current economic landscape, Smith writes.
TrendsJul 14, 2026
Amanda’s Style File: Shoulder Dusters These long, fluid drop earrings are sure to catch the eye.
CrimeJul 14, 2026
Man Charged in $1M Jewelry Store Heist Lands on FBI Most Wanted ListAlberto Perez-Elias is one of four men charged with robbing a Cape Coral, Florida, jewelry store and is the only one still at large.
Events & AwardsJul 14, 2026
Conference on Mining, Sustainability Kicks Off in NYCInitiatives in Art and Culture is hosting its 16th annual Gold and Diamond Conference, with the theme of “Resilience.”
Lab-GrownJul 13, 2026
Stephanie Gottlieb Changes Her Mind on Lab-Grown DiamondsThe designer, who once said she’d never sell lab-grown diamonds, debuted two capsule collections designed to be fun and easy to wear.
SourcingJul 13, 2026
De Beers Announces Potential Layoffs, 2-Year Production Pause at VenetiaThe diamond miner and marketer is undergoing another round of cost-cutting measures ahead of its sale by Anglo American.
Events & AwardsJul 13, 2026
Registration Opens for JIS Fall 2026 ShowThe annual trade-only buying event is slated for Oct. 16-19 in Miami Beach, Florida.
Events & AwardsJul 13, 2026
AGTA Accepting Entries for Spectrum 2026AGTA also has announced the lineup of judges for the colored gemstone cutting and jewelry design contest’s various categories.
TechnologyJul 10, 2026
There’s a New Blind Box for Luxury Watches Collectibles platform Arena Club’s new Time Boxes could contain a Rolex or Patek Philippe watch.
TrendsJul 10, 2026
Jade Trau Creates a Constellation of DiamondsThe “Constellation Plié” collar, our Piece of the Week, features diamonds arranged in a constellation of shining stars.
SourcingJul 10, 2026
CFO of De Beers’ Consumer-Facing Division Leaves Company Shaun Wills joined the company in 2024 and was chief financial officer of the De Beers Brands and Consumer Markets division.
WatchesJul 10, 2026
Brilliant Earth Expands Into WatchesIn honor of its 20th anniversary, the jewelry brand has released a limited-edition collection of Swiss-made timepieces.
CollectionsJul 09, 2026
Boucheron’s New High Jewelry Collection Is an Ode to the Human Touch“Human Being” highlights the similarities and differences between us through five sets of jewelry that celebrate fine craftsmanship.
WatchesJul 09, 2026
Damiani Group Finalizes Acquisition of Baume & MercierRichemont will continue to provide operational services for the watch brand for a period while the group prepares to integrate it.
AuctionsJul 09, 2026
Pharrell Williams’ Joopiter Hires Former Bonhams Exec to Head New Watch DivisionNate Borgelt will lead the digital auction house and content platform’s new division as head of watches.
Events & AwardsJul 09, 2026
Halstead Names 2026 Grant WinnerEnoch Platero, founder and designer behind Enoch Michael, is the first Native American jeweler to win the award.
Events & AwardsJul 09, 2026
AGS, GIA Name 2026 Beatrice Shipley Scholarship WinnerAGS also announced the recipient of its “Women in Leadership” scholarship.
MajorsJul 08, 2026
Kendra Scott Joins ‘Shark Tank’ As Permanent Investor The founder of the billion-dollar jewelry and lifestyle brand will debut as a full-time “Shark” on the upcoming season of the show.
SurveysJul 08, 2026
Signet Jewelers Falls 5 Spots on NRF’s ‘Top 100’ Retailers ListPlus, why retailers should be ready to adjust as the U.S. population may decline this year for the first time since the Great Depression.
