Has anyone else gotten a 1099k for the 1st time ever for 2020 when well below limits?

[chris1099khuh]

For years I've sold odds and ends as an individual on ebay using paypal and never exceeded (never got anywhere near) the $20,000 AND 200 transaction threashold. In 2020 I was even lower than other years with less than $4000 received through paypal and by the time one factors in shipping cost and ebay fees, that amount goes down to near $2000 (not even kidding) so why do I have a 1099 now that says it has been reported to the IRS?  Why does it still say Paypal only reports if over $20,000 AND 200 transactions when neither are the case for me? From how this looks, Its as if I have to pay full taxes on the reported income and never mind the ebay fees and shipping cost that ultimately are removed from that.

[levpv]

I have exactly the same problem this year - just received the statement this morning. I am way under $20,000 and slightly over 200 transitions (212 to be exact), selling books and clothes my kids have outgrown on Ebay! According to the IRS and Paypal websites, you have to be both over 20,000 AND over 200 transactions to receive 1099K and count this as reportable income - unless I am stupid and not reading this correctly. I do not understand if they reported this to IRS, do i have to pay income tax on the amount of total? What about ebay/paypal/postage expenses? This is crazy!

https://www.irs.gov/payments/general-faqs-on-new-payment-card-reporting-requirements

https://www.paypal.com/va/smarthelp/article/how-does-paypal-report-my-sales-to-the-irs-will-i-receiv...

I also live in VA and apparently, the state made all income received through online auctions/sales as reportable if you cross the $600 threshold! This is also crazy! 

https://virginia-accountants.org/vataxnews/9335905#:~:text=For%20Virginia%20tax%20purposes%2C%20thir....

The way i am reading it so far - i don't have to pay federal tax because i have not met the thresholds, but i may have to pay state tax?

I do the taxes myself as they are not complicated, just W2s, now i have a feeling i would have to hire an accountant...

[Duggadugdug]

Same issue for me here @levpv  -- been selling off old items now that I'm downsizing certain hobbies. I've never received a 1099K before and am WAY under the federal reporting threshold, but have the misfortune of living in Virginia (whose law now requires it for any annual total over $600). I'm now scrambling trying to figure out how to credibly show that these few thousand dollars that have been reported to the IRS do NOT constitute income that I should pay tax on.

The toughest threshold issue for me is figuring out which PayPal transactions have gone into calculating the Gross Amount of transactions (in 1099K box 1A) that has been reported to the IRS. The total of all my eBay sales is still several hundred dollars shy of that amount, and I'm trying to figure out how they arrived at the number that I now need to explain to the IRS.  Is there someone at PayPal I can contact to find out, or any way to get an itemized list of the 1099K transactions?

[Chief444]

Greedy Illinois has the same problem.....they have the threshold at $600?  It makes no sense to send this form to the IRS, IF THE IRS DOES NOT REQUIRE THIS TO BE REPORTED.

[Sang07]

Some US States require merchant reporting at a lower threshold:

• Vermont, Massachusetts, Virginia, Maryland: $600 USD in gross payment volume from sales of goods or services in a single calendar year regardless of the number of transactions;
• Illinois: $1,000 USD in gross payment volume from sales of goods or services in a single calendar year with at least 3 payment processed