After this year the applications known as cash apps have to report transactions that exceed $600 dollars to the IRS, the question arises as to whether my money sent or received through Zelle generates taxes.
The Internal Revenue Service (IRS) rules around money transfer applications, known to many as cash apps, have changed in recent months. We cannot deny that after Paypal and Venmo, which are from the same company, Zelle is one of the favorites among American consumers. That is why the question arises: does Zelle report my income received through its platform to the IRS?
In principle, the company makes a clarification that the answer to this question applies exclusively to its platform and is only for informational purposes, so it encourages its clients to receive tax advice from a professional.
Simply put, Zelle claims that it does not report transactions made through its network, the Zelle Network, to the IRS.
By law, some payment apps or networks, such as Paypal and Venmo, are required to provide 1099K forms for the reporting of tax information necessary for taxpayers at the time of their tax returns. According to the company, this rule does not apply to Red Zelle.
As the company points out, if the payments you receive through the Zelle Network are taxable, it is your sole responsibility to report them to the IRS in a timely manner. For which in any case, if you still have doubts, he suggests you consult with a tax professional.
Since January 1 of this year, payment and money transfer applications such as Venmo, PayPal, CashApp, among others, are required to report business transactions that exceed $600 dollars per year to the IRS. To do this, they require submitting a 1099K form.
Since then, Zelle reported that this law does not apply to them, even if the total exceeds $600, since payments between friends and family, and eligible small businesses sent through the Zelle Network because it facilitates messaging between institutions but does not have accounts or handle the settlement of funds.
This is not to say that business transfers cannot be made through Zelle. Eligible small businesses can use your app to send and receive money. Even in this case, the company does not report transactions made through the Zelle Network to the IRS, even when they are payments made for the sale of goods and services. The company insists that it is the responsibility of small businesses that use its services to file their taxes with the IRS, if applicable.