To crack down on ticket scalping across the country, a new law will tax anyone making more than $600 each year through ticket-selling websites like StubHub and Ticketmaster, according to the Wall Street Journal.
As part of the American Rescue Plan Act, the Internal Revenue Service (IRS) now requires that ticketing companies report these users with a 1099-K form that asks for information on “payment card and third-party network transactions.” The reporting requirement is triggered by sale price and not just the seller’s profit.
The filing of a 1099-K form was previously required only for those making more than $20,000 on 200 or more transactions each year. The IRS explained that “there are no changes to what counts as income or how tax is calculated.
The new law will apply to the 2023 tax year, with forms set to be sent out in early 2024. According to the Wall Street Journal, industry groups and critics of the new law say it is inconvenient for companies and confusing for customers.
While sending and receiving tax forms between ticket marketplaces and professional ticket sellers is commonplace, tax reporting is new for many individual sellers.
TickPick’s Chief Financial and Administrative Officer, Michele Rusnak, said the company is likely to issue at least ten times as many 1099-K forms this year compared to previous years. The IRS estimates it will receive 44 million of these forms under the new law, rising from 11.1 million in 2021.
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