August 28, 2026
If you run a small tour or charter business, you probably saw the headlines. The much-feared $600 reporting rule for Form 1099-K is dead. The old $20,000 threshold is back. For a lot of small sellers, that's real relief.
But here's the part nobody put in the headline: that threshold only covers one of the two kinds of companies that send a 1099-K. Depending on how your card deposits are processed, you may get a form no matter how small your season was — and even if you don't, you still owe tax on every dollar.
Let's walk through what actually changed, why card payments can play by different rules, and what to have ready before the 2026 filing season.
The 2025 law raised the reporting threshold for payment apps and marketplaces back to $20,000 and 200 transactions. That's the news everyone shared.
The catch is that this threshold only applies to one type of filer: third-party settlement organizations — the payment apps and online marketplaces like PayPal or Venmo. There's a second type of filer, the processors that settle credit- and debit-card payments, and for them there's no minimum at all. According to the IRS's own FAQ, a single card sale of one cent is enough to trigger a Form 1099-K.
So whether the rollback actually helps you comes down to one question: which kind of filer handles your bookings? Many tour operators will still receive a 1099-K — either because their card payments are settled with no minimum, or because they cross the threshold, or because their state sets a lower one. The threshold change is good news for plenty of people. It's just not the blanket exemption it sounds like.
The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, repealed the $600 reporting threshold that came out of the 2021 American Rescue Plan Act (ARPA). In its place, the law brought back the older, much higher threshold: a third-party payment platform doesn't have to file a 1099-K unless your gross payments top $20,000 and you run more than 200 transactions in the year. Both conditions have to be met.
This isn't just a rule for the future. On October 23, 2025, the IRS published Fact Sheet 2025-08 (through news release IR-2025-107), which replaced its earlier guidance and confirmed the restored $20,000/200 threshold applies retroactively to tax years starting after December 31, 2021. In plain terms: it covers your 2025 return, filed in 2026 — not just some far-off future filing.
It helps to see how we got here:
If that moving target gave you whiplash, you weren't alone. And it's exactly why the card-payment rule matters so much — because it never moved.
Here's the line most 1099-K explainers skip. The IRS FAQ is blunt about it: "There is no threshold amount that must be met to receive a Form 1099-K due to payments received through a payment card transaction. Therefore, if you received $0.01 of payments from a payment card transaction, you should receive a Form 1099-K for those payments."
The IRS also confirms this rule "has not changed" — there's no minimum for payment-card transactions, and the form covers the full gross amount no matter how small the total.
Why the difference? There are two separate kinds of companies that issue a 1099-K, and they follow different rules:
Here's the wrinkle, and it's the important one: a single well-known brand can sit in either bucket depending on how your account is set up. The same company that acts as a plain card processor for one business can act as a third-party settlement organization for another. As Wilson Lewis puts it, "a retail store that accepts credit cards will always have those payments reported on Form 1099-K by its card processor, even for a single $5 sale." Whether that describes your setup — or the higher-threshold TPSO rule does — depends entirely on how your payments are configured. If you want a refresher on how card processing works for tour deposits, we've covered the mechanics separately.
Think about how a tour actually gets booked. A guest finds you online, picks a date, and pays a deposit — or the whole balance — with a credit or debit card, right there at checkout. Very few tour operators collect deposits through a personal Venmo or PayPal balance the way a casual side-hustle seller might. Your money comes in by card.
That matters, because the $20,000/200 threshold — the whole point of the rollback — may not protect your booking revenue the way it protects an occasional online seller's. If your card payments are settled by a processor that reports with no minimum, you'll get a 1099-K even after a slow, small-dollar season. If they run through a platform that files as a TPSO, the threshold applies and you might not.
So the single most useful thing you can do before filing is ask your booking or payment provider one direct question: do you report my card payments as a merchant acquirer with no minimum, or as a third-party settlement organization under the $20,000/200 threshold? That one answer tells you whether a form is coming — and it beats guessing from the headlines.
When the form arrives, the number in Box 1a is going to look bigger than the money you actually kept. That's by design.
The IRS instructions require Box 1a to report the "gross amount" of your transactions — the total dollar figure with no adjustment for fees, refunds, discounts, chargebacks, or anything else. So the 1099-K shows the full amount your guests paid, before your booking platform's processing fee ever came out.
Two things follow from that:
Yes — and plenty of operators will. If you take payments through more than one channel in the same year, each one can send its own form. A card processor issues a 1099-K for the card payments it settled. If you also sell through a marketplace or an online travel agency that acts as a TPSO, that platform may issue a separate 1099-K for the transactions it handled — but only if you crossed its threshold.
The practical move: don't assume the totals will line up. Reconcile every form you receive against your own records, so you're not accidentally double-counting revenue that shows up on two different forms.
The federal threshold went up, but several states never followed. According to analysis from RSM, Massachusetts and Maryland still require 1099-K reporting at just $600, and New Jersey requires it at $1,000.
There's a second wrinkle. Some states aren't part of the IRS Combined Federal/State Filing Program — Florida and Tennessee among them — which can mean separate, direct filing at the state level. If you operate in the U.S., check your own state's rule rather than assuming the federal number is the whole story. (While you're reviewing state-level payment rules, it's worth knowing the state-by-state credit card surcharge rules too.)
Because the change is retroactive, the IRS built in transition relief. Platforms that already issued 1099-Ks under the lower, now-repealed thresholds don't have to amend or withdraw them. And platforms that didn't file under those lower thresholds won't be penalized for it.
One more thing to keep in mind: a TPSO can still choose to send you a 1099-K below the $20,000/200 threshold if it wants to. RSM notes this voluntary reporting is allowed. So getting a form from a payment platform doesn't automatically mean you crossed the line — it might just be that platform's policy.
This is the part worth saying plainly, because the threshold noise can blur it. Whether or not a 1099-K shows up in your mailbox, all the income you earn from tours and charters is taxable, and you're required to report it.
As the tax advisors at Kahn Litwin point out, not receiving a form — because you're under a threshold, or a processor simply didn't file — does not make that revenue tax-free. The form is just a copy of information the IRS may already have. Your obligation to report your income stands on its own.
Here's the short version to keep by your desk:
The 1099-K rollback is genuinely good news for a lot of small sellers. For tour operators, the real takeaway is quieter: the threshold only tells half the story, so find out how your payments are reported, build your records to match — and report every dollar you earn, form or no form.
