Tax Form MAC Will Send
The MAC Marketplace will comply with the IRS tax laws regarding TPSOs and the implementation of the ARP Act of 2021. For the tax year 2023, you will not receive any forms from us. However, you will receive IRS Form 1099-K if you meet the threshold requirements.
MAC Marketplace falls in the category of third party settlement organizations (TPSOs) and we will follow the IRS rulings on the latest threshold requirements. The good news is the $600 limit has been delayed and will get phased in over the next couple of years. For 2023, this threshold still remains at $20,000.00 or 200 transactions.
WHAT FORMS WILL I RECEIVE FROM MAC MARKETPLACE
Since we are a new online marketplace and our first official year is 2024, you will not receive any IRS informational form from us. However, we will send out the required forms if you meet the 2024 threshold. According to the latest IRS announcement in November 2023, the 2024 threshold is planned to be $5000.00. So to be clear, there is not an official amount set. The current IRS plan is to phase in the amount and they are planning to set the threshold at this amount. We’ll provide updates as we learn more about the official 2024 threshold.
I heard the American Rescue Plan Act of 2021 was delayed
Yes, that is correct. The IRS announced they will delay the implementation of this new ARP (American Rescue Plan) of any online marketplace to send IRS Form 1099-K to any seller who received $600.00 or more. Per the IRS announcement, ARP threshold will get phased in over the next couple of years. For 2023 tax year, the threshold has not changed.
Although the implementation of the new threshold is delayed, you may still receive IRS Form 1099-K from another TPSOs if you received $20,000.00 or had over 200 transactions in 2023. Keep in mind, you’ll only receive this form from an online marketplace or a payment app like PayPal® and the like.
When will the $600 threshold take affect
There was also some confusion on the $600 threshold that was supposed to be implemented in 2022. This means if you sell on other marketplaces or use payment apps, you might receive a 1099-K for 2023. The good news is you only need to report only the income over $20,000.00. If you do receive a 1099-K and it is for less than $20,000.00, we recommend you consult with your accountant or a tax professional on how to properly handle this form, and if and where to report it on your 2023 tax return.
Based on the announcement from IRS on November 1, 2023, this threshold will be phased in over the next couple of years. The announcement does not specifically state when the $600 threshold will take affect. We’ll keep you informed as we learn more about the implementation of the ARP Act threshold.
SUMMARY
You will not receive any IRS Form 1099-K from MAC Marketplace for tax year 2023. However, you will receive this form from us in 2024 if you cross the threshold. At the time this post was written, the official threshold for 2024 is yet to be determined.