Back in 2008, I reported that eBay and PayPal would have to start sending 1099s out to sellers who use those sites.
In the original bill, it was proposed that credit card processors would be required to file Form 1099 (there will be a new 1099-K just for credit card merchants) for each seller that has at least $10,000 in gross sales and 200 transactions. Since then the numbers have changed to at least $20,000 in gross sales and 200 transactions, so less people will be affected by this new rule.
This rule is not limited to just eBay and PayPal. All credit card merchants – including Amazon, eBay, PayPal, etc. – must start complying with the new rule beginning in 2011.
Given the amount of revenue and the number of transactions, this new rule won’t affect very many people. But if you do meet the income and transaction requirements, don’t panic. As long as you are reporting your income on your tax return, there’s no reason to worry about the new 1099 rules 
{ 3 comments… read them below or add one }
Using TURBO TAX where do I find the place on the 1040 to key in for lines [27] (1/2 self employment tax) [29] (Self Employed SEP SIMPLE and Qualified Plans, and line [32] (IRA deductions)??
The headline says $20,000 OR 200 transactrions, the article says $20,000 AND 200 transactions. Which is it?
Good catch droffats. Per the IRS website, it should be AND.
“Exception for de minimis payments. A third party settlement organization is required to report any information concerning third party network transactions of any participating payee only if for the calendar year:
The gross amount of total reportable payment transactions exceeds $20,000, AND
The total number of such transactions exceeds 200.”