*Statements and opinions included in this article should not be construed as professional advice. Please consult your accountant and/or tax attorney.
With every new year comes updates to tax regulations, and for Disney Vacation Club (DVC) members looking to rent out their points, understanding these changes is essential. The IRS has once again adjusted the reporting thresholds for third-party payment processors like PayPal and Venmo, which may impact how rental income is reported.
What is the 2024 Form 1099-K Reporting Threshold on PayPal?
Initially, the IRS planned to enforce a $600 reporting threshold for goods and services transactions. However, this has been delayed once again. For 2024, the threshold for receiving a Form 1099-K has been set at $5,000 in total goods and services payments. If you exceed this amount in DVC rental income through PayPal or Venmo, you can expect to receive a 1099-K form for tax reporting purposes.
Additionally, PayPal and Venmo will issue a 1099-K for any customer subjected to backup withholding, regardless of the total payment volume.
State-Specific 1099-K Thresholds
While the federal reporting threshold is $5,000 for 2024, some states have set lower thresholds. If you reside in one of the following states, PayPal and Venmo will issue a 1099-K if your earnings exceed:
- Vermont, Massachusetts, Virginia, Maryland – $600 in gross payment volume from goods or services in a single calendar year.
- Illinois – More than $1,000 in gross payment volume and at least four separate transactions.
Your Form 1099-K is based on your primary address as of the last day of the previous tax year. If you recently moved to one of these states, your income may still be reported under the rules of your prior state until the next tax year.
DVC Rental Store and 1099 Reporting
Now don’t get me wrong – When it comes to the United States, federal and state tax laws have always considered the money received by an owner in a DVC Rental transaction taxable income. However, some international DVC rental companies and private renters have skirted around this requirement for years.
With this new tax law, the playing field for DVC rentals has essentially been leveled, leaving no grey area to sneak through without paying your taxes. The only thing members looking to rent should consider now is getting the most value for their DVC points.
Our partners at DVC Rental Store have always prioritized transparency and IRS compliance when it comes to rental transactions. DVC members renting their points through DVC Rental Store in 2025 will receive a 1099 form if their rental income exceeds the applicable threshold. Payments made via ACH or check will be reported by DVC Rental Store, while those processed through PayPal or Venmo will be reported directly by those payment platforms.
Regardless of whether you receive a 1099-K, all rental income is taxable and should be reported to the IRS. While a 1099 form simplifies the reporting process, it remains your responsibility to properly document and report any rental earnings.
Looking Ahead: 1099-K Threshold Changes
The IRS has laid out plans for gradual threshold reductions over the next two years:
| Tax Year | Year Form Available | Federal Reporting Threshold |
|---|---|---|
| 2024 | 2025 | More than $5,000 in gross sales from goods or services. |
| 2025 | 2026 | More than $2,500 in gross sales from goods or services. |
| 2026 | 2027 | More than $600 in gross sales from goods or services. |
By 2026, the threshold is expected to drop to $600, making it more likely that rental income will be reported for most DVC owners using third-party payment services.
Final Thoughts
Renting out your DVC points is a great way to maximize their value, but it’s important to stay informed about tax regulations. If you’re unsure how these rules impact your situation, consult a tax professional to ensure proper compliance. As always, the DVC Rental Store team is there to help guide you through the rental process while keeping everything above board with IRS regulations.
*Statements and opinions included in this article should not be construed as professional advice. Please consult your accountant and/or tax attorney.
tom carney
February 27, 2025It works be nice if you guys could look into how you write off the cost of the purchase and the cost of the dues to offset the 1099 you receive that shows you made income when in reality you have alor of expense to offset the income..
Jacqueline A
February 27, 2025“More than $5,000 in gross sales from goods or services.”
How does this even work for those of us who paid in full for our contracts in 2023 and 2024? On top of annual dues, how would one ever find a true and honest gross sale? Legitimately asking. I’ve asked a few tax consultants, and no one has deal with this kind of rental situation.