What people mean by the “$600 rule”
The “$600 rule” refers to a change in law (first set in the American Rescue Plan of 2021) that would have required third‑party payment platforms like Venmo, PayPal and Cash App to send a Form 1099‑K to users who received more than $600 in aggregate business payments in a year. It never meant “$600 from a single payer,” and it never applied to purely personal transfers like splitting fuel, meals, or gifts. Those myths continue to circulate and are wrong.
Where things stand as of November 27, 2025
Congress changed course in 2025. Under new law and updated IRS guidance, the 1099‑K threshold has been reinstated to the pre‑2021 standard: platforms generally issue a 1099‑K only if you have more than $20,000 in gross payments and more than 200 transactions in a calendar year. In other words, the $600 threshold is not in effect for 2025. The IRS’s current pages reflect this reversion and continue to clarify that personal, friends‑and‑family transfers are not reportable on Form 1099‑K.
Why this matters to owner‑operators and small fleets
Most freight payments still move by ACH, wire, or through factoring. But many small carriers use payment apps to collect short‑haul revenue, detention, lumper fees, or spot reimbursements. Here’s how the rules affect you:
- If a shipper or broker pays you by credit card or through a third‑party platform (e.g., Venmo Business, PayPal Goods & Services), the payment platform—not your customer—handles any 1099‑K reporting when thresholds are met.
- If you’re paid by ACH, check, or cash directly for services, that typically falls under 1099‑NEC rules, and your customer issues the information return when applicable (generally $600+). Payments made by card/third‑party network should not be double‑reported on a 1099‑NEC.
- Whether or not you receive a 1099‑K, all business income is taxable. The form reports gross payments, not your profit—fees, refunds, and chargebacks aren’t netted out. Keep documentation so you can deduct ordinary and necessary expenses on Schedule C (or your entity return).
- Personal transfers—splitting fuel with another driver, gifts from family, etc.—are not supposed to be reported on a 1099‑K and aren’t taxable income. Label those transactions correctly inside the app to avoid confusion.
Beware misinformation (and scams)
We reviewed a widely shared PDF claiming that Venmo must report “over $600 from a single payer” and advertising a phone “support” line. That is inaccurate. The IRS threshold is not “per payer,” and the current federal threshold for platform reporting is the $20,000/200‑transaction standard, not $600. Treat unsolicited “support” numbers and third‑party PDFs with caution; rely on IRS.gov or your tax pro.
1099‑K vs. 1099‑NEC: prevent double reporting
For trucking businesses, misclassification creates headaches. If a customer pays you via card or a third‑party network, that payment belongs on a 1099‑K (if thresholds are met) and should not also appear on a 1099‑NEC. If you receive both forms for the same income, request a correction from the issuer to avoid mismatches in IRS records. The IRS explicitly instructs that card/third‑party payments are reported on 1099‑K—not 1099‑NEC/MISC.
Action checklist for truckers using Venmo or similar apps
- Use a business profile for goods/services; tag personal transfers as “friends & family.”
- Keep clean books: reconcile app statements to your TMS and bank; track platform fees, refunds, chargebacks, and sales tax separately.
- Avoid mixing personal and business funds; a dedicated business account makes audits easier.
- If you receive an unexpected 1099‑K for personal transfers, contact the platform promptly and keep records to support a correction.
- Confirm your EIN/TIN in app settings to prevent backup withholding or mismatches.
- Coordinate with brokers: agree on payment method (card vs. ACH) so everyone knows which form—if any—will be issued.
Bottom line
For tax year 2025, the “$600 Venmo rule” is not in force. Trucking businesses will generally see a 1099‑K from payment apps only if they exceed $20,000 and 200 transactions, while all business income remains taxable regardless of forms received. Separate business from personal activity, keep meticulous records, and watch out for misinformation so tax season doesn’t jackknife your cash flow.
Sources Consulted: Internal Revenue Service (Newsroom; Understanding Your Form 1099‑K; Form 1099‑K FAQs and Instructions); Taxpayer Advocate Service; Mitchell Hamline PDF.
Need to file your Form 2290?
Join thousands of owner-operators and carriers who trust HeavyTax.com for fast and easy HVUT e-filing.
This article was prepared exclusively for truckstopinsider.com. For professional tax advice, consult a qualified professional.
