Red Tape Reduction Act of 2025
Term Dictionary
If you come across any unfamiliar words while reading, these resources can help make everything clearer. Pick whichever one works best for you!
- Congress.gov Legislative Glossary - Comprehensive congressional terms
- NVFC Congressional Terms Glossary - Concise, easy-to-understand definitions
The gist
Raises the threshold before payment apps like Venmo, PayPal, and Etsy must send tax forms (1099-K) to users and the IRS ā€” from $600 to over $10,000 or 50+ transactions.
Who wins, who loses
- Wins: casual sellers on eBay, Etsy, Depop; freelancers; people splitting rent on Venmo.
- Loses: Internal Revenue Service (IRS) tax enforcement; those who argue small sellers underreport income.
What it does
- Amends Internal Revenue Code Section 6050W to set the reporting trigger at over $10,000 OR more than 50 transactions per year.
- Repeals the American Rescue Plan Act's $600 threshold.
- Applies to transactions settled after December 31, 2024.
- Adjusts backup withholding rules to match the new threshold.
Why should I care?
Teens selling sneakers, art, or gaming gear online could avoid surprise tax forms. Supporters say the $600 rule buried casual sellers in paperwork for hobby income. Critics argue higher thresholds let real business income go unreported, shrinking tax revenue. Where do you land? Vote below and use "Tell Your Rep" to make sure your voice reaches Congress.