H.R. 1882 — Saving Gig Economy Taxpayers Act

This section reinstates the de minimis exception for third party settlement organization reporting of third party network transactions under IRC §6050W(e), requiring a Form 1099-K only if payments to a participating payee exceed $20,000 and there are more than 200 transactions (as prior to the American Rescue Plan Act of 2021, which lowered the monetary threshold to $600 with no minimum number of transactions). The change applies as if included in the American Rescue Plan Act provision (§9674) that lowered the thresholds.

This section limits backup withholding under IRC §3406 to payments in settlement of third party network transactions (i.e., payments to merchants processed through payment card networks or third-party networks and reported under IRC §6050W) by treating such payments as reportable payments only if the participating payee's aggregate transactions for the calendar year exceed both the dollar amount threshold in §6050W(e)(1) and the transaction number threshold in §6050W(e)(2). The limitation does not apply if such payments to the payee were reportable payments in the prior calendar year. (Thus, low-volume payees below the de minimis thresholds generally avoid backup withholding.) The amendments apply to calendar years beginning after December 31, 2024.