# Prop. Treas. Reg. § 31.3406(b)(3)-1: Reportable payments of rents, commissions, nonemployee compensation, etc.

Proposed regulation, not in force. REG-113229-25, 91 FR 20599, published 2026-04-17 <https://www.federalregister.gov/documents/2026/04/17/2026-07519/increase-in-threshold-for-requiring-information-reporting-with-respect-to-certain-payees-extension>. Interprets 26 U.S.C. § 3406.

Par. 10. Section 31.3406(b)(3)-1 is amended by: 1. Revising the second sentence of paragraph (a). 2. Revising the heading of paragraph (b)(3) and revising paragraph (b)(3)(i). 3. Revising paragraph (b)(3)(ii)(A). 4. Revising the heading and the first sentence of paragraph (b)(3)(ii)(B). The revisions read as follows:

(a) * * * See paragraph (b) of this section for an exception concerning payments aggregating less than the dollar threshold in effect for the calendar year under section 6041(a) and (h). * * *

(b) * * *

(3) Payments exceeding threshold —(i) In general. A payment is a reportable payment under paragraph (a) of this section only if the aggregate amount of the current payment and all previous payments to the payee during the calendar year equals or exceeds the dollar threshold in effect for the calendar year under section 6041(a) and (h). The amount subject to withholding is the entire amount of the payment that causes the total amount paid to the payee to equal or exceed the dollar threshold in effect for the calendar year under section 6041(a) and (h), plus the amount of any subsequent payments made to the payee during that calendar year. This paragraph (b)(3)(i) does not apply to gambling winnings (as provided in § 31.3406(g)-2(d)(1)).

(ii) * * *

(A) The aggregation rule. The aggregation rule of paragraph (b)(3)(i) of this section does not apply if the payor was required to make an information return under section 6041 or 6041A(a) for the preceding calendar year with respect to payments to the payee, or the payor was required to withhold under section 3406 during the preceding calendar year with respect to payments to the payee that were reportable under section 6041 or 6041A(a).

(B) Determination of whether payments exceed the dollar threshold. In determining whether payments to a payee equal or exceed the dollar threshold in effect for the calendar year under section 6041(a) and (h) for purposes of withholding under section 3406, the payor must aggregate only payments of the same kind made to the same payee. * * *

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