HB1882, titled the "Saving Gig Economy Taxpayers Act," would amend the Internal Revenue Code to restore the pre-American Rescue Plan Act reporting threshold for third-party settlement organizations. Under the bill, platforms that process payment card and third-party network transactions would only have to issue information returns for a participating payee if the annual total exceeds $20,000 and the number of transactions exceeds 200. The bill is aimed at reinstating the prior de minimis exception that had been narrowed by the American Rescue Plan Act.
The bill also adds a conforming change to backup withholding rules so that payments settled through third-party network transactions are treated as reportable payments only when they meet the same reporting threshold. It further provides that the change would apply as if it had been included in the American Rescue Plan Act, and the backup withholding amendment would apply to calendar years beginning after December 31, 2024.
Impact
If enacted, HB1882 would reduce the number of tax information returns required from payment platforms and third-party settlement organizations, especially for small-scale sellers, freelancers, and gig economy participants who receive payments through apps and online marketplaces. It would amend sections 6050W and 3406 of the Internal Revenue Code, effectively restoring the older reporting threshold and aligning backup withholding rules with that threshold. The practical effect would be to lessen reporting and compliance burdens for smaller payees and the platforms that process their transactions.
Sentiment
The bill’s framing and title suggest strong support from sponsors who view it as relief for gig economy taxpayers and small online sellers. Because no committee transcript or vote record is provided, there is no recorded debate in the supplied materials, but the introduction by a sizable bipartisan-looking group of House members indicates at least some interest in the proposal. Overall, the available context points to a favorable posture among supporters toward reducing IRS reporting burdens.
Contention
The main point of contention is likely the tradeoff between reducing compliance burdens and preserving tax reporting visibility for the IRS. Supporters appear to favor restoring the higher threshold to avoid overreporting small transactions, while potential opponents may argue that the lower threshold adopted under the American Rescue Plan improves tax compliance and helps detect underreported income. The bill specifically targets third-party payment platforms and gig workers, so the dispute centers on whether the reporting rules are too onerous for small transactions or necessary for enforcement.
Saving Gig Economy Taxpayers Act This bill modifies requirements for third party settlement organizations to eliminate their reporting requirement with respect to the transactions of their participating payees unless they have earned more than $20,000 on more than 200 separate transactions in an applicable tax period. A third party settlement organization is the central organization that has the contractual obligation to make payments to participating payees (generally, a merchant or business) in a third party payment network. This reverses a provision in the American Rescue Plan Act of 2021 that lowered the reporting threshold to $600 with no minimum on the number of transactions.