HR 1882
Saving Gig Economy Taxpayers Act
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Bill overview
This bill, the Saving Gig Economy Taxpayers Act, aims to reinstate a previous rule regarding how payments made through third-party settlement organizations (like payment card networks) are reported to the IRS. Specifically, it adjusts the reporting thresholds for these transactions, reducing the reporting requirements for smaller payments. It also modifies backup withholding rules to account for these settlement transactions.
Key provisions
- Reinstates a de minimis reporting threshold for third-party settlement organizations.
- Sets a $20,000 threshold for reporting third-party network transactions.
- Establishes a 200-transaction threshold for reporting third-party network transactions.
- Modifies backup withholding rules to consider third-party network transactions.
- Creates an exception to backup withholding if payments were reported in the prior year.
- Applies the changes starting December 31, 2024.
Who is affected
- Gig economy workers
- Payment card networks
- Third-party settlement organizations
- Businesses that utilize payment card networks
- The Internal Revenue Service
Notable changes
- Reverses changes made by the American Rescue Plan Act regarding reporting thresholds for third-party network transactions.
- Adjusts the reporting requirements for payments made through third-party settlement organizations.
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Primary sponsor
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119th CONGRESS — 1st Session
H. R. 1882
IN THE HOUSE OF REPRESENTATIVES
A BILL
To amend the Internal Revenue Code of 1986 to reinstate the exception for de minimis payments by third party settlement organizations with respect to returns relating to payments made in settlement of payment card and third party network transactions, as in effect prior to the enactment of the American Rescue Plan Act, and for other purposes.
This Act may be cited as the Saving Gig Economy Taxpayers Act
.
the aggregate number of such transactions exceeds 200.
Section 3406(b) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
Any payment in settlement of a third party network transaction required to be shown on a return required under section 6050W which is made during any calendar year shall be treated as a reportable payment only if—
the aggregate number of transactions with respect to the participating payee during such calendar year exceeds the number of transactions specified in section 6050W(e)(2), and
the aggregate amount of transactions with respect to the participating payee during such calendar year exceeds the dollar amount specified in section 6050W(e)(1) at the time of such payment.
Subparagraph (A) shall not apply with respect to payments to any participating payee during any calendar year if one or more payments in settlement of third party network transactions made by the payor to the participating payee during the preceding calendar year were reportable payments.
The amendments made by this section shall apply to calendar years beginning after December 31, 2024.