Venmo (and our parent company, PayPal) is required to report payment activity and provide tax documents in certain situations. Read on to learn about this year’s reporting requirements.
IRS Reporting Thresholds for Tax Year 2025
Venmo's IRS 1099-K tax reporting requirements only pertain to payments received for sales of goods and services and DO NOT apply to friends and family payments.
For the 2025 calendar year, Venmo and PayPal will issue Form 1099-K only when your payments for goods and services exceed $20,000 and you have more than 200 separate transactions in the calendar year. Personal (friends & family) payments are excluded. Some states have lower reporting thresholds:
- Maryland (MD): ≥ $600
- Massachusetts (MA): ≥ $600
- Vermont (VT): ≥ $600
- Virginia (VA): ≥ $600
- Illinois (IL): > $1,000 and 4+ separate transactions
Venmo and PayPal will file Form 1099-K for any customer who met the reporting threshold or was subject to backup withholding during 2025. Customers who had backup withholding applied during the year can claim a credit or refund for backup withholding when filing their tax returns with the IRS.
Recent changes in tax laws from OBBBA
The One Big Beautiful Bill Act (OBBBA), enacted in 2025, permanently restored the prior federal reporting threshold of more than $20,000 and more than 200 transactions for Form 1099-K. The IRS had previously planned lower thresholds based on previous tax laws, but those changes were postponed and repealed. Read on for more information on how these changes may affect you.
Tax Documents You May Receive
- PayPal and Venmo will file Form 1099-K for any customer who was subject to backup withholding during the 2025 tax year, regardless of total payments for the year. This form will include the total amount of backup withholding PayPal or Venmo sent to the IRS on your behalf before the thresholds were changed by the IRS. In the case where an individual state has a lower threshold, PayPal and Venmo will report accordingly.
Customers with Backup Withholding
- PayPal and Venmo withheld money from certain accounts that were missing tax information at a rate of 24 percent, as required by the IRS. We will issue customers a Form 1099-K and they will be able to claim a credit or refund of the backup withholding when they file their own taxes with the IRS. For more information, visit the IRS website here and here.
IRS Reporting Thresholds for Previous Years
Congress and the IRS have adjusted reporting thresholds for third-party settlement organizations (like Venmo, PayPal, and similar services) several times in recent years. Starting with the 2025 calendar year, the federal reporting threshold for Form 1099-K is more than $20,000 in gross payments and more than 200 transactions.
Previous years’ reporting thresholds were as follows:
- 2022: $20,000 and 200 transactions, with lower thresholds for some states
- 2023: $600 initially; deferred to the prior threshold of $20,000 and 200 transactions, with lower thresholds for some states
- 2024: $600 initially; deferred to a transitional threshold of $5,000, with lower thresholds for some states
This reporting requirement applies to individuals, sole proprietors, and registered businesses who received payments for the sale of goods and/or services using Payment Settlement Entities like Venmo (and similar services).