New Law Lowers Reporting Threshold for 1099-K Information Reporting
The Vermont Department of Taxes reminds third party settlement organizations that Act 73 of 2017 changed Vermont’s 1099-K information reporting law under 32 V.S.A. § 5862d. These changes took effect retroactively on Jan. 1, 2017, and apply starting in tax year 2017.
The new law requires third party settlement organizations to report payments that equal or exceed $600 per person. This reporting threshold replaces the previous threshold of $20,000 and 200 or more transactions per person, which was based on federal law. Act 73 also added enforcement provisions, so that a failure to provide the information required by Vermont’s 1099-K law will be considered a failure to file a return. Penalties may apply.
Filing with the Department continues to be due 30 days after the filing due date for the IRS. Third party settlement organizations should file the same report with the Department that they have filed in the past. Starting in January 2018, they may file electronically using myVTax. A copy of the 1099-K filing must also be sent to each person who receives payments.