As of January 1, 2022, mobile payment apps like Zelle and Venmo are required to report “commercial transactions” totaling more than $600.00 per year to the Internal Revenue Service.

However, the Internal Revenue Service will not be taxing transactions between family or friends, which is how most people use Zelle or Venmo.

This new change was signed into law as part of the American Rescue Plan Act. Prior to the change, mobile payment apps were required to inform the Internal Revenue Service when a person had over 200 commercial transactions per year that exceeded $20,000.00.

So, who does this new law apply to?

The change only affects commercial users of Zelle or Venmo such commercial sellers on eBay.

While this may see confusing to some users, if you are impacted, the mobile payment service will now issue a 1099 form to users to explain exactly what is being reported to the Internal Revenue Service.

Most users will not be impacted by the recent change, and will not have to worry about tax reporting.