This article was updated on January 3, 2024, to provide additional information regarding the federal delay in lowering the filing threshold. The previous article is available here.
The Tennessee General Assembly enacted legislation which requires payment settlement entities, third party settlement organizations, electronic payment facilitators, and third parties acting on behalf of payment settlement entities to file duplicate federal 1099-K information returns with the Department of Revenue (the “Department”). The 1099-K information returns must be filed with the Department within 30 days of the filing due date required by the IRS.
Only businesses meeting certain thresholds must file form 1099-K with the IRS. The threshold has historically been aggregate payments exceeding $20,000 and 200 transactions for the calendar year. The IRS proposed lowering the threshold and requiring businesses file a 1099-K if the aggregate payments exceeded $600 for the calendar year. However, the IRS recently issued Notice 2023-74, delaying the implementation of the lower threshold.
Because the lower threshold was delayed at the federal level, it is also delayed at the state level. Therefore, for calendar year 2023 (and prior years), only businesses with aggregate payments with Tennessee payee addresses that exceed $20,000 and 200 transactions must file a duplicate copy of form 1099-K with the Department.
For more information, please read important notice #16-01.
Reference: Tenn. Code Ann. § 67-6-411.