Why PayPal, Venmo and Cash App payments may affect your 2025 taxes

Anyone who used PayPal, Venmo or Cash App in 2025 may need to take a closer look at their tax return.

Published on: Feb 09, 2026 11:30 AM IST

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Anyone who used PayPal, Venmo or Cash App in 2025 may need to take a closer look at their tax return. The IRS has warned that some payments received through digital platforms may count as taxable income and must be reported, even if no tax form is issued.

The IRS has stressed that the absence of a tax form does not eliminate reporting requirements. (Pexel)

According to Marca, the agency is expanding its focus on digital transactions as payment apps are increasingly used for selling goods, offering services and operating side businesses.

When payment apps trigger tax forms

Payment platforms that process transactions for goods or services are required to issue Form 1099-K once users cross certain thresholds.

Traditionally, the form is generated when payments exceed $20,000 and involve more than 200 transactions in a calendar year.

Also Read: IRS confirms $1,776 payment to 1.5 million Americans is tax-free: Who qualifies and why it matters

However, the IRS has said some users may still receive a 1099-K below those levels, depending on how transactions are categorized or routed.

Business owners who accept credit, debit or gift card payments through these apps may receive a 1099-K regardless of transaction volume. Users who sell across multiple apps or marketplaces may also receive more than one form, each reflecting activity on a separate platform.

Income counts even without paperwork

The IRS has stressed that the absence of a tax form does not eliminate reporting requirements.

“Whether or not you receive a Form 1099-K, you must still report any income on your tax return,” the IRS said. That includes payments for goods sold or services provided, including personal items sold at a profit.

The guidance applies to income earned through online marketplaces, auction sites, craft platforms, ticket resale services, car-sharing apps, crowdfunding platforms and freelance work.

Also Read: Missed your stimulus check? Here’s how Americans can still claim unpaid pandemic payments

Personal payments are treated differently

The IRS draws a distinction between business income and personal payments. Money received as a gift, reimbursement or shared expense is not taxable income.

Examples include splitting meals, sharing travel costs, receiving birthday or holiday gifts or being reimbursed by a roommate for rent or utilities, Marca reported.

IRS is advising taxpayers to review their 2025 payment activity carefully. Income earned through PayPal, Venmo or Cash App may still need to be reported, even without official tax documents.

ABOUT THE AUTHOR
Prakriti Deb
Prakriti Deb is a journalist at Hindustan Times Digital, where she is part of the US Desk. She works on stories related to American politics, crime, sports, entertainment and weather. She particularly enjoys covering political developments that have global ripples. Through her work, she aims to break down complex events in a way that feels simple and understandable. Before joining the Hindustan Times, she worked with The Indian Express Digital, where she covered world affairs. She holds a postgraduate degree in Mass Communication with a specialisation in Journalism, along with a bachelor’s degree in English Literature. Outside the newsroom, Prakriti enjoys travelling and stepping out of her comfort zone. She finds her sense of being through storytelling in all its forms, including conversations, painting, theatre, dance and photography. She appreciates discussions that challenge her perspective and help her see the world a little differently.Read More

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