What the "$600 rule" actually was
The $600 figure was never a new tax. It was a lowered threshold for when a payment app has to send you (and the IRS) a Form 1099-K — an information report about your goods-and-services payments. The 2021 law dropped that trigger from "over $20,000 and 200 transactions" all the way to "$600, no transaction minimum." The IRS then delayed it for years, and in 2025 the One Big Beautiful Bill Act repealed it entirely.
The rule that actually decides if you owe tax
Here's what the panic missed: whether you owe tax has nothing to do with the form. It depends only on what the money was for.
Personal money is never taxable. Gifts, reimbursements, your share of dinner, roommates sending rent — none of it is income, at any amount. It shouldn't even be on a 1099-K.
Business and service money is always taxable — freelance work, selling products, a side hustle — whether or not you get a form. Getting no 1099-K does not make freelance income tax-free.
Selling personal items splits: at a loss (the usual case for used stuff) it's not taxable and not deductible; at a gain (resold concert tickets, collectibles) the profit is a taxable capital gain.
If you get a 1099-K for money that wasn't income
Because some states set lower thresholds, you might receive a 1099-K even for personal payments or a garage-sale loss. Don't panic and don't ignore it. The IRS's method: report the amount on Schedule 1, line 8z ("Form 1099-K received for personal payments" or "personal item sold at a loss"), then enter the same amount as an offset on line 24z. The two cancel out and nothing is taxed — but the paperwork now matches what the IRS received.
Check your payment-app money → Free checker: say what the money was for and see instantly whether it's taxable and whether a 1099-K is likely.