US Tax law requires that Upwork provide certain US-based freelancers with IRS form 1099-K as proof of income. It has details that freelancers need in order to file their taxes or to apply for certain government benefit programs. Due to recent changes to US tax law (including The American Rescue Plan Act of 2021), some freelancers who did not qualify in the past may qualify to receive a 1099-K starting with the 2022 tax year. The new rule will be effective beginning with payment transactions settled after December 31, 2021.
For transactions taking place prior to the 2022 tax year, so before December 31, 2021, freelancers only received a 1099-K Form from Upwork when they had reached both of the following on Upwork in the tax year:
- $20,000 in payments
- 200 transactions
Prior to 2022, you would not receive a form if you did not meet both of these requirements. These requirements are still true for the 2021 tax year, and 1099-K Forms for 2021 are expected to be mailed out at the end of January 2022.
For transactions taking place after December 31, 2021, freelancers will receive a 1099-K if they have at least:
- $600 in payments on Upwork
Under the law, there will no longer be a minimum number of transactions. If a freelancer meets the new payment requirements in 2022, they will receive a 1099-K in January 2023.
This article does not address all tax issues for freelancers, and you should not rely on it as legal advice. We strongly encourage all readers to seek tax advice based on their particular circumstances from an independent tax advisor.