IRS issues warning for PayPal, Venmo, Cash App users for tax season

Americans who use popular payment apps like PayPal, Venmo or Cash App in 2025 are being told a rule that could affect how they file their taxes this season.

The rule concerns a special tax form known as a Form 1099-K, which shows payments people received for sales or services including through payment apps and online marketplaces, according to the Internal Revenue Service (IRS).

However, Americans will only need to fill these documents out if they received payments for goods or services totaling over $20,000 in more than 200 transactions.

These payments can be made through any of the following methods:

• Payment app
• Online community marketplace
• Craft or maker marketplace
• Auction site
• Car sharing or ride-hailing platform
• Ticket exchange or resale site
• Crowdfunding platform
• Freelance marketplace

Those accepting payments on different platforms can expect more than one Form 1099-K, the IRS said.

The service also noted that Americans can receive the form even when total payments or transactions are less than the reporting threshold.

Additionally, people receiving payments for selling goods or services are required to report all income on their tax return, regardless of the amount of reported payments.

But it should be noted that money received from friends and family as a gift or repayment for a personal expense should not be reported on a Form 1099-K, because it is not considered a taxable income.

This includes sharing the cost of a car ride or meal, receiving birthday money, getting repaid by a roommate for rent or a household bill.

“Be sure to note these types of payments as non-business in the payment apps when possible,” the IRS said.