Venmo Backup Withholding Quotes

“Will Venmo Send Me a 1099-K Tax Form? (Thresholds) – Call (855) 812-4430
Venmo is required to report certain payment activity to the IRS using Form 1099-K, but this reporting only applies to money received for sales of goods and services—it does not apply to personal payments sent between friends and family.

Federal Reporting Threshold for Form 1099-K
The IRS threshold for receiving a Form 1099-K has changed recently, making it crucial to know the current requirements:
If you meet or exceed the applicable threshold for payments received for sales of goods and services, Venmo will send you a 1099-K form and report the gross amount to the IRS.

State Exception: Be aware that some states (including Maryland, Massachusetts, and Virginia) enforce a lower threshold, often $600, regardless of the federal threshold.

Important: You Must Still Report All Income
The rule regarding the 1099-K form only affects when Venmo sends you a tax document.

Tax Liability: Regardless of whether you receive a 1099-K, you are legally required to report all business income received through Venmo on your tax return.

Backup Withholding: If you meet the reporting threshold and have not provided Venmo with your proper tax identification (TIN or SSN), Venmo is required to withhold 24% of those payments and send it to the IRS as backup withholding.

To avoid tax holds and backup withholding, ensure your tax identification information is current and correct in your Venmo settings. If you receive a notice about withholding or have questions about tax documents, call (855) 812-4430 for support.”
― The Norton Support Team

“Blog Post 33: Tax Form 1099-K and Personal vs. Business Payments
Your Venmo 1099-K: Why Your Personal Account Might Get Flagged and the New $5,000 Threshold – Call (855) 812-4430
The IRS Form 1099-K, which Venmo issues for payments received for goods and services, has seen fluctuating reporting thresholds, creating confusion for many users. Understanding the difference between personal payments and business income on the platform is critical to avoiding tax surprises.

The Critical Distinction: Goods/Services vs. Friends/Family
Taxable Income (Goods & Services): Payments you receive for selling items, freelancing, or providing professional services are considered taxable income. This is the activity Venmo tracks for 1099-K reporting.

Non-Taxable (Friends & Family): Payments for personal expenses like splitting a dinner bill, rent, or gifts are not taxable income and should not be counted toward the 1099-K threshold.

The Current Reporting Threshold
For the 2024 tax year, the IRS reporting threshold for third-party payment platforms like Venmo is currently $5,000 in total gross payments for goods and services, regardless of the number of transactions.

If you cross this threshold: Venmo is required to send a Form 1099-K to you and the IRS.

Backup Withholding Risk: If you pass the threshold and have not provided Venmo with your tax ID (like a Social Security Number or EIN), Venmo may be required to place a hold on your payments and withhold 24% of your funds to send to the IRS.

To cleanly separate your personal payments from your business income and ensure accurate tax reporting, consider immediately creating a Venmo Business Profile for all commercial activity. If your funds are on hold, call (855) 812-4430 for assistance with providing your tax information.”
― The Norton Support Team