Form 1099-K for resellers: the $20,000 and 200 rule

A 1099-K is the form a selling platform or payment app sends when your sales pass a set amount. It reports the gross money that moved through your account, not what you made. Here is when one is sent, why the number looks too big, and what the IRS says to do with it.

From the IRS’s own pages, checked October 18, 2026 (sources at the end). This page explains a form. It is not tax, legal or accounting advice; take questions about your own return to a tax professional.

When a platform must send one

A marketplace such as eBay, Poshmark, Mercari or Depop, or a payment app, must send a Form 1099-K when the payments it settled for you in a year are more than $20,000 and come from more than 200 transactions. Both have to be true.

That is the rule that applied before 2021. The One, Big, Beautiful Bill put it back, and the IRS says the change applies retroactively; the lower $5,000, $2,500 and $600 thresholds that had been planned do not apply. The IRS set this out in Fact Sheet 2025-08 on October 23, 2025.

Two things can still bring a form below that line: a platform may send one anyway, and some states set lower thresholds of their own.

No form does not mean no tax

The threshold decides only whether the platform reports your payments. It does not change what is taxable. In the IRS’s words, “All income, no matter the amount, is taxable unless the tax law says it isn’t,” with or without a 1099-K. Income paid in cash or outside a platform counts the same way.

Why the form shows more than you made

The 1099-K reports gross payments: what buyers paid, before the platform’s fees, before the labels you bought and before what the items cost you. The IRS notes that the amount does not account for the original purchase price of anything sold, or whether it sold at a gain or a loss.

So a seller who sold $25,000 of items with $3,000 in fees, $2,000 in labels and $15,000 in item cost sees $25,000 on the form, not the $5,000 left over. Your own records of each sale are what tell the two apart.

Personal items, gains and a side business

The IRS treats these differently:

A personal item sold for less than you paid (an old couch, last year’s coat): the loss cannot be deducted, and there is no tax on the sale. The IRS describes two ways to report it so the form’s amount is not counted as income: at the top of Schedule 1 (Form 1040), or as a loss on Form 8949 carried to Schedule D.
A personal item sold for more than you paid: the gain is taxable, reported on Form 8949 and Schedule D.
Selling as a business or side business, including buying to resell: the IRS points self-employed sellers, including hobby sellers, to Schedule C (Form 1040).

Which of these fits your sales is a question for a tax professional; the IRS’s page linked below has the detail. If the form itself is wrong, ask the platform that sent it for a corrected one. The IRS says it cannot correct a 1099-K for you.

The records that answer the form

For each sale, keep the sale price, the shipping the buyer paid, the platform’s fee, what you paid for the label and what the item cost you, plus any refund. Platform reports have most of it: on eBay, the Transaction report lists every order, fee, label and refund (see how to read the eBay Transaction report). The net after fees calculator shows what a single sale kept.

Sources

IRS, FAQs on the Form 1099-K threshold under the One, Big, Beautiful Bill (IR-2025-107, Fact Sheet 2025-08), October 23, 2025.
IRS, Form 1099-K FAQs: general information, last updated April 3, 2026.
IRS, What to do with Form 1099-K, last updated July 27, 2026.

Checked October 18, 2026. Tax rules change; the IRS pages above are the authority.