Getting paid on Venmo or Cash App? This new tax rule might apply to you

If you use payment apps like Venmo, PayPal or CashApp, the new year ushered in a change to an IRS tax reporting rule that could apply to some of your transactions.

The new rule, which took effect January 1, doesn't impose any additional taxes on payment app users. But it does make it harder for someone to evade existing taxes owed if they're getting paid through an app for business transactions.

Payment app providers now must issue you and the IRS a Form 1099-K on your business transactions if, combined, they total more than $600 a year. It used to be they only needed to do so if you had more than 200 business transactions in a year that totaled at least $20,000.

A business transaction is defined as payment for a good or service, including tips. So it does not include personal transactions, such as being reimbursed by a friend for dinner or receiving money to pay for a group gift.