HR-1882 : Still Just a Bill

The "Saving Gig Economy Taxpayers Act" (H.R. 1882) aims to modify tax regulations related to payments made through third-party networks like PayPal or Venmo. Here's a breakdown:

• Reinstates De Minimis Exception: The bill seeks to reinstate the previous threshold for reporting payments made through third-party networks. Under the prior rule, these platforms only had to report payments to the IRS if a user received more than $20,000 and had more than 200 transactions in a year. This was changed by the American Rescue Plan Act.
• Retroactive Effect: The change would be applied as if it were in effect when the American Rescue Plan Act was enacted.
• Backup Withholding: H.R. 1882 also addresses backup withholding, clarifying that payments through third-party networks are only subject to backup withholding if they exceed the reinstated reporting thresholds ($20,000 and 200 transactions). However, if a payee's transactions exceeded these thresholds in the previous year, all payments in the current year would be subject to backup withholding.
• Effective Date: The backup withholding provisions would apply to calendar years starting after December 31, 2024.

In short, this bill intends to ease the reporting requirements for smaller transactions made through third-party payment platforms, potentially reducing the tax burden and reporting obligations for individuals participating in the gig economy or making occasional sales.