The federal 1099-K threshold is back at $20,000 and 200-plus transactions, and a lot of freelancers have taken that as the whole story. It is not. Nine jurisdictions never adopted the federal number in the first place, and they are not required to. If you live in one of them, a payment app can still send you a 1099-K at a fraction of the federal line, and the form arrives whether or not you were expecting it.

The federal reset didn’t touch state law

Congress and the IRS control the federal 1099-K threshold, which is the number that made headlines twice this year: first when it looked like the ARPA-era $600 threshold might finally take hold, then when the One Big Beautiful Bill Act reset it back to $20,000 and 200-plus transactions. That federal number governs when a payment app or marketplace has to report to the IRS.

It has never governed when a state requires its own reporting. Several states wrote their own third-party settlement reporting rules years ago, independent of whatever Congress does with the federal threshold, and none of those state rules moved when OBBBA reset the federal one.

Where the $600 threshold is still real

Massachusetts led with its own $600 threshold under a 2017 Department of Revenue ruling, and Washington, D.C., Maryland, Montana, North Carolina, and Vermont later adopted the same figure. New Jersey set its own threshold at $1,000, and Missouri at $1,200. None of these states require the 200-transaction count the federal rule uses. One large payment is enough to trigger a form.

Nine jurisdictions still send a 1099-K far under the federal line $600 state 1099-K threshold in DC, MD, MA,MT, NC, VT and VA, regardless of thefederal $20,000 reset
Jurisdiction1099-K thresholdTransaction minimum
DC, Maryland, Massachusetts, Montana, North Carolina, Vermont, Virginia$600None
New Jersey$1,000None
Missouri$1,200None
Everywhere else (federal default)$20,000200+
State 1099-K reporting thresholds that still undercut the federal reset, 2026 04008001,2001,600$600DC600Maryland600Massachusetts600Montana600NorthCarolina600Vermont600Virginia1,000New Jersey1,200Missouri

Every state below the federal line drops the transaction count entirely, not just the dollar figure. Sources: Massachusetts DOR, and each listed state’s own third-party settlement reporting statute.

Why this catches freelancers off guard

A platform reports based on where you live, not based on which threshold made the news. If your address on file with a payment app is in one of these nine jurisdictions, that platform applies your state’s threshold to you specifically, even if every other client of theirs nationwide is sitting comfortably under the $20,000 federal line. Move to Virginia mid-year and a platform that never sent you a form before might send one this year, purely on the strength of your new address.

None of this changes what you owe. A 1099-K, at any threshold, is a reporting form, not a tax bill, and its absence never made income tax-free in the first place. What it changes is whether a form shows up in your mailbox that you were not expecting, and whether that form’s numbers match the income you already tracked yourself.

Track your own numbers regardless of the threshold

The safest position is the same one that made sense before this whole threshold debate started: keep a record of every payment you collect that does not depend on which state you live in or which platform routed the money. A 1099-K reflects what one payment processor decided to report for the year. It will not capture a client who paid you by bank transfer, and it will not match your books if you moved states or switched platforms mid-year.

A BillyPaid receipt attached to each payment gives you that independent record the moment the money lands, so a low-threshold 1099-K from Massachusetts or a no-show 1099-K anywhere else changes nothing about what you can show at tax time.