Have you sold more than $600 in used kids’ clothes and furniture over a year? 

Have you sent more than $600 to friends and roommates to split the costs of concert tickets, meals, and rent?

Have you sent more than $600 in gifts to family members like siblings or adult kids?

Have you earned $600 or more in cash through gig work?

Any of these scenarios could have spurred additional tax reporting. Known as the “Venmo tax” for shorthand, a terrible policy change under the previous administration opened the door for confusing new income reporting to the IRS that could have—but should not have—led to a tax bill.  

Instead of a paperwork nightmare this tax filing season, you can rest a little easier thanks to the Working Families Tax Cuts. 

Congressional Republicans and President Donald Trump cut the red tape that would have entangled millions of people this tax filing season.

Conservatives restored the original reporting requirements aimed at small businesses rather than allowing the IRS to shake down innocent moms, young adults, side-hustling taxpayers, and retirees.

What Happened

The One Big Beautiful Act, passed in 2025, fixed the tricky new reporting requirements that former President Joe Biden and Democratic congressional lawmakers imposed on every household to pay for their inflationary spending bill.

As I explained shortly after the tax cuts were passed: 

… a friend splitting a dinner bill with you using Venmo, a Cash App gift for your birthday from a sibling, or payment from the sale of used kids’ clothes and furniture on Facebook Marketplace. All of these income-generating online transactions could trigger new reporting to the IRS thanks to the Biden-era American Rescue Plan Act (ARPA).

…

Originally, this reporting requirement was meant for small businesses selling items online. Reporting kicked in at sales of $20,000 and 200 transactions in a calendar year. This is a reasonable level for someone who is actively in business.

 

The Biden administration and Democrat-led Congress lowered that reporting threshold down to just $600 and no transaction limit in a year. This limit was too low, as Democrats even admitted.

For several years, the IRS delayed the reporting requirement from taking effect because it was ill-prepared to handle the avalanche of paperwork or the questions and concerns from taxpayers. Unilaterally, the IRS declared a phased-in approach that lowered the threshold to above $5,000 for 2024, above $2,500 for 2025, and then in 2026, it would be lowered to just $600. 

We reported on this here, here, here, and here.

Women would have been negatively affected by the Venmo tax in many ways:

  • Selling pre-owned kids’ clothes, apparel, furniture, and workout equipment to supplement family budgets on resale websites such as Etsy, eBay, and Poshmark. 
  • Using third-party payment platforms, like PayPal, Venmo, or Cash App, to collect payments for services.
  • Sending gifts to family members, like siblings and parents, or paying friends for a girls’ night out, or sending roommates your share of the rent and utilities.

These transactions should generally be non-taxable, but would have to be reported anyway, triggering privacy concerns. As tax expert Kimberley Pinto explained in the Daily Caller:

If you sell your car at a loss but for more than $600 and receive payment electronically, it is none of the IRS’ business. At the same time, that transaction may result in a Form 1099-K filing, leading to unnecessary audit notices and headaches for taxpayers.

The good news: The Working Families Tax Cut repealed this reporting threshold and returns it to the original level of $20,000 and 200 transactions.

Bottom Line

For many years, Independent Women and many other groups have called on Congress to fix this egregious paperwork burden. We’re thankful that conservatives heeded those calls and delivered tax savings and lessons on the red tape burdens on hardworking Americans and families.