If you collect session fees through Venmo, PayPal, Ivy Pay or another payment app, you may have heard that a lot more therapists would start getting a tax form called a 1099-K. For a while that was the plan. It changed, and the 1099-K threshold for 2026 is back where it used to be.
So most solo therapists won’t see one of these forms for their app payments. What hasn’t changed is that every dollar a client pays you is still income, no matter which app it comes through. Here’s what the form is, who gets one now, and what to do if one shows up.
What a 1099-K is and why therapists keep hearing about it
A 1099-K is a form that payment apps and card processors send to report how much money they moved to you during the year. You get a copy, and so does the IRS.
You heard about it because Congress had planned to lower the limit for payment apps a lot, and the IRS spent a few years phasing that in. The One Big Beautiful Bill Act, signed in July 2025, put the old limit back. That’s why so much of what you read online about this is now out of date.
The 1099-K threshold for payment apps in 2026
Today a payment app like Venmo, PayPal or Ivy Pay only has to send you a 1099-K when you’re paid more than $20,000 in more than 200 transactions in a year. The IRS explains it on its Understanding your Form 1099-K page.
Some apps send the form even when you’re under that limit, so don’t be surprised if one shows up. Card payments are their own thing too. If clients pay you by credit or debit card through a card processor, you can get a 1099-K for those no matter how many payments there were.
Does a 1099-K mean you owe more in taxes?
No. The form doesn’t create a new tax. Your session income was always taxable, whether it came from insurance, a check, Zelle or Venmo. The 1099-K is just a second record that lets the IRS compare what the app reported with what you reported.
So the real question is whether your own records are complete. If you track income from every place clients pay you, a 1099-K never changes anything. If you’ve been counting on a missing form to mean the income doesn’t count, that’s where people get into trouble. Our guide to bookkeeping for therapists is a good place to start if your tracking needs some help.
Zelle, Venmo, PayPal and Ivy Pay: which ones report
Venmo, PayPal, Ivy Pay and similar apps are the kind of payment service that sends a 1099-K once you’re over the limit. Zelle moves money straight between bank accounts, so it isn’t in that group and won’t send you this form. That doesn’t make Zelle payments any less taxable. You just have to track them yourself.
Money from friends and family doesn’t belong on a 1099-K either. The IRS says payments for gifts or shared expenses, like splitting dinner, shouldn’t be reported on one. This is where things get messy if you use the same Venmo account for your practice and your personal life.
What to do if your 1099-K amount looks wrong
If you do get a 1099-K, the number on it may be higher than what you actually kept. Apps report the total that went through your account, and that can include a session fee you later refunded. You fix that on your tax return by showing the refund, which is much easier when your books are up to date month by month.
When the form arrives, compare it with your own income records before you hand anything over. If they don’t match, figure out why. Then make sure your accountant knows every app you use. Don’t toss the form because you already report everything. The IRS has a copy, and your return needs to line up with it.
Keep personal and business payments separate
The simplest fix for all of this is a payment account used only for your practice and linked to your practice checking account. Then everything in that account is business income, and nothing personal gets mixed in.
If you’re an S-corp, set that account up under your business name and EIN, which is your business’s tax ID number, so any form goes to the business instead of to you personally. Our personal vs. business expenses in private practice post walks through how to untangle things if they’re already mixed. If you’re still deciding whether an S-corp makes sense, our S-Corp vs PLLC calculator for therapists can help.
You don’t need to keep up with every change to these rules. You just need clean records of what clients paid you, and we can help with the rest.
Reach out and let’s talk through how your practice gets paid.
TL;DR:
The 1099-K threshold for payment apps is back to more than $20,000 and more than 200 transactions, so most solo therapists won’t get one for app payments. Your session income is taxable either way, so track every app, including Zelle, and keep business payments in their own account.
