What the “$600 rule” actually means
The “$600 rule” is shorthand for a 2021 law that would have required payment apps to send IRS Form 1099-K to anyone who received $600 or more for goods and services in a year. That label stuck, even as the federal threshold changed multiple times and caused widespread confusion. Importantly, Form 1099-K reports gross payments received for business transactions; it does not apply to personal reimbursements like splitting fuel or meals. You must still report all taxable income whether or not you receive a 1099-K.
What changed for 2025 filings (the returns you’re filing in early 2026)
For calendar year 2025, Congress and the IRS restored the pre-2021 federal reporting standard: payment platforms such as Venmo issue a 1099-K only if you had both more than $20,000 in goods-and-services payments and more than 200 transactions for the year. That means many casual or occasional app payments won’t trigger a federal 1099-K this season.
That federal threshold deals with reporting by the platform, not your tax liability. Owner-operators and fleet managers must still include all business income on their returns, regardless of whether a 1099-K or 1099-NEC arrives.
State exceptions that matter
Several states keep their own lower reporting thresholds. For example, Virginia requires a 1099-K when a payee with a Virginia address receives $600 or more; Massachusetts also requires $600 or more regardless of transaction count. If you operate or reside in those states, you could receive a state 1099-K even when you don’t meet the federal 20,000/200 test.
Illinois uses a $1,000-and-4-transactions rule for payees with an Illinois address. Check your state’s revenue department for current guidance if you run multi-state operations.
How this affects truckers using Venmo
Many owner-operators and small fleets use peer-to-peer apps to get paid for hotshot runs, short-notice recoveries, or parts and roadside help. Here’s how to avoid 1099-K headaches:
- Use the right payment type: Only payments marked as goods and services count toward 1099-K. Personal “friends and family” reimbursements (splitting a hotel room, fuel advances between drivers) aren’t reportable—but don’t mislabel business income as personal.
- Expect “gross” totals: A 1099-K shows gross receipts, before app fees or chargebacks. Keep records so you can deduct legitimate expenses (processing fees, parts, tolls) on your tax return.
- Mind your state: Even if you don’t hit the federal 20,000/200, a state 1099-K may still arrive (e.g., VA and MA at $600). Don’t ignore it—use it to reconcile your Schedule C or business return.
- Keep clean books: For mixed personal/business use, tag each transaction and retain invoices, delivery confirmations, and settlement statements. If a 1099-K looks off, you’ll need documentation to correct it.
Practical steps to stay compliant
- Separate business activity: Consider a business profile on payment apps or a dedicated processor for freight invoices. It simplifies recordkeeping and reduces the risk of personal reimbursements being swept into business totals.
- Collect taxpayer info early: If a platform requests your EIN/SSN to prevent backup withholding, provide it promptly to avoid a 24% hold on eligible payments.
- Reconcile monthly: Match app reports to your TMS, bank feeds, and settlement sheets. This makes year-end 1099-K reconciliation far easier.
- Coordinate with 1099-NECs: If brokers issue a 1099-NEC and you also take app payments, make sure you don’t double count. Use your books—not any one form—as the system of record.
Watch for “Venmo support” scams
Fraudsters often post fake “Venmo support” numbers online or in random PDFs. Don’t call numbers from unsolicited messages or documents. For help, use in-app chat or the official Help Center contact options. Venmo also publishes common scam red flags—review them and train dispatch or back-office teams who handle payments.
Editor’s note: The PDF referenced in the original tip was unavailable at the time of writing. We verified current rules using IRS and state tax agency guidance cited above.
Bottom line for trucking businesses: Federally, the “$600 rule” is no longer the operative standard for 2025 income—you’ll generally see a 1099-K only if you exceed $20,000 and 200 transactions on a platform. But state thresholds can be much lower, so keep rigorous records, classify transactions correctly, and reconcile app activity with your books to stay audit-ready.
Sources Consulted: IRS Newsroom and FAQs; Massachusetts Department of Revenue; Virginia Department of Taxation; Illinois Department of Revenue; Venmo Help Center.
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This article was prepared exclusively for truckstopinsider.com. For professional tax advice, consult a qualified professional.
