Ways and Means advances Form 1099-K bill

The House Ways and Means Committee advanced four bills on party-line votes last week, including legislation (H.R. 190) that would restore the $20,000 and 200 transaction threshold for 1099-K reporting via third-party payment companies.

The American Rescue Plan Act of 2021 decreased the threshold for reporting third-party network transactions under Section 6050W to $600 effective without regard to the number of transactions. The change was originally meant to be effective for 2022, but the IRS delayed the rules for 2022 and 2023 and set a transitional threshold of threshold of $5,000 for payments made in 2024.

There is significant bipartisan support for increased threshold above $600, but Democratic support fades as the threshold rises. Rep. Dan Kildee, D-Mich., suggested that if the bill established a permanent $5,000 threshold it would receive bipartisan support. Ultimately, the bill was reported favorably by committee along party lines, though could have a tough time becoming law in what remains of this Congress. Lawmakers could consider a compromise provision in a lame-duck session, but there are hurdles. The bipartisan extenders bill that passed the House and failed in the Senate would not have addressed the provision.

In its Sept. 11 markup the Ways and Means Committee also advanced four other bills:

• H.R. 9495, the Stop Terror-Financing and Tax Penalties on American Hostages Act, which aims to tighten controls on charities under suspicion of aiding foreign terrorist organizations, as well as waive tax deadlines for Americans held hostage by terrorists
• H.R. 9461, the USA Workforce Investment Act, which would create a tax credit for individuals who donate to nonprofits engaged in workforce training programs
• H.R. 9462, the Educational Choice for Children Act, which would create a tax credit for individuals who donate to nonprofits providing scholarships to primary and secondary school students
• H.R. 3269, the Law Enforcement Innovate to De-Escalate Act, which would exempt non-lethal weapons procured by law enforcement agencies from sales taxes

H.R. 9495 passed by a 38-0 margin; all other bills received majority votes largely along party lines, although notably H.R. 3269 is co-authored and was introduced by a Democrat. Even the provisions that enjoy bipartisan support could struggle to find a legislative vehicle and will have to compete with many other priorities.  

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