After years of confusion, the 1099-K threshold has finally been settled. The One Big Beautiful Bill Act, signed on July 4, 2025, permanently repealed the $600 reporting threshold and reinstated the original rules. Here's what that means for your reselling taxes in 2026.
The New (Old) 1099-K Threshold
The rule is now simple:
You'll receive a 1099-K from a platform only if you exceed BOTH:
- $20,000 in gross payments, AND
- 200 transactions
Both conditions must be met. If you sold $25,000 in goods across 150 transactions, you won't get a 1099-K. If you had 300 transactions but only $15,000 in gross payments, no 1099-K either.
The Timeline: How We Got Here
| Year | What Happened | Threshold |
|---|---|---|
| Pre-2022 | Original rule | $20,000 AND 200 transactions |
| 2022 | American Rescue Plan lowered threshold | $600 (any number of transactions) |
| 2023 | IRS delayed implementation | $20,000 AND 200 (transitional relief) |
| 2024 | IRS delayed again, proposed phased approach ($5,000) | $5,000 phased plan announced |
| July 4, 2025 | One Big Beautiful Bill Act signed | $20,000 AND 200 permanently restored |
| 2026 | Current law, applies retroactively to 2025+ | $20,000 AND 200 |
The IRS's phased plan ($5K → $2.5K → $600) is entirely superseded. It's not coming back.
What This Means for Most Resellers
If you're a part-time reseller doing under $20,000/year in gross sales or under 200 transactions, you likely won't receive a 1099-K from any platform. This is a significant relief — the $600 threshold would have triggered tax forms for practically every casual seller.
However, here's the part that catches people off guard:
Platforms May Still Report Below the Threshold
One nuance many resellers miss: platforms are not required to issue 1099-Ks below the threshold, but they can voluntarily do so. Some platforms may choose to report at lower amounts for their own compliance reasons.
Don't be surprised if you receive a 1099-K even if you're below $20,000/200 transactions. It doesn't mean you did anything wrong — it just means the platform chose to report.
State-Level Thresholds: The Catch
Federal law sets the $20,000/200 floor, but individual states can set lower thresholds. Several states require platforms to issue 1099-Ks at much lower amounts:
- Vermont, Massachusetts, Virginia, Maryland, and several others have thresholds at or below $600
- Illinois removed its 200-transaction requirement as of January 1, 2026
- Check your specific state's requirements — they vary widely
If you live in a low-threshold state, you may receive a state 1099-K even when you're well below the federal threshold.
How the 1099-K Calculates "Gross Payments"
The $20,000 figure is gross payments — the total amount buyers paid, including shipping and sales tax. It is NOT your profit. This is important because:
- An item you sold for $50 with $8 shipping counts as $58 toward the threshold
- Sales tax collected and remitted by the platform still counts toward gross payments
- Returns and refunds may or may not be subtracted (varies by platform)
This means you could hit the $20,000 gross payments threshold while only profiting $5,000–8,000 after COGS, fees, and shipping.
What You Should Be Tracking
Whether or not you receive a 1099-K, keep records of:
- Cost of goods sold (COGS) — What you paid for each item at the thrift store, estate sale, or garage sale
- Platform fees — Mercari's 10%, Poshmark's 20%, eBay's 13.6%
- Shipping costs — Postage, packaging materials, labels
- Business expenses — Mileage to thrift stores, photography equipment, storage, supplies
All of these reduce your taxable income. A reseller with $20,000 in gross sales might only owe taxes on $5,000–8,000 after legitimate deductions. See our guide on tracking profits with a spreadsheet to stay organized.
Self-Employment Tax: The Other Shoe
If reselling is a regular activity (not just cleaning out your personal closet), the IRS considers it self-employment. That means you may owe:
- Self-employment tax: 15.3% on net profit (Social Security + Medicare)
- Income tax at your regular bracket on net profit
The self-employment tax alone is why tracking expenses is so important. Every dollar of deductible expense saves you roughly $0.15 in SE tax plus your income tax rate.
Other 2026 Tax Changes for Resellers
- 1099-NEC/1099-MISC threshold increased from $600 to $2,000 for tax year 2026
- DC sales tax rising from 6% to 7% effective October 1, 2026
- Standard mileage rate for 2026: check IRS.gov for the current rate (typically announced in December)
The Bottom Line
The $20,000/200 transaction threshold is here to stay. For most casual and part-time resellers, this means less paperwork and fewer surprise tax forms. But the underlying obligation hasn't changed: profit is taxable income, 1099-K or not.
Keep good records, track your expenses, and consult a tax professional if your reselling income is significant. For more on reseller-specific deductions, see our Reseller Taxes 101 guide.