Form 1099-K Instructions & Tax Reporting Pointers
Payment Card and Third Party Network Transactions
The 1099-K is an information return used to report the gross or unadjusted amount of reportable payments made by a payment settlement entity (PSE) for payment card and third party network transactions made to each participating payee for the calendar year.
Applicable businesses: Payment settlement entities PSE are the organizations responsible for reporting the payments made to participating payees. For payment card transactions, merchant acquiring entities are the PSE, and for third party network transactions, the third-party settlement organizations (TPSO) are the PSE. A merchant acquiring entity is the bank, or credit card company that processes credit card, debit card or stored value card transactions on behalf of a merchant. A TPSO has the contractual obligation to make payments to participating payees. The most common example of a TPSO is an online auction-payment facilitator, a digital payment services processor or an organized gig freelancer payment platform.
When to file: 1099-K forms must be provided to recipients by January 31 and e-filed with the IRS by March 31.
PSEs that are merchant acquiring entities settled payment card transactions for any amount or PSEs that are third-party settlement organizations (TPSO) settled payments using their network provided that a payee’s reportable transactions exceed $20,000 and the number of transactions exceed 200 for the calendar year. This includes payments through any: Peer-to-peer payment platform, digital wallet, online marketplace, auction site, car sharing or ride-hailing platform, real estate marketplace, ticket exchange or resale site, crowdfunding platform, or freelance marketplace
PAYMENTS OUTSIDE THE U.S.
Payments made outside the United States to an offshore account may have different reporting requirements; you should check the IRS website for instructions regarding specific situations.
Need to make a correction? No problem! Here's how you can get started with 1099 corrections.
Review important W-2 requirements for employee filing.
Who: An entity that makes a payment in settlement of a reportable payment transaction
When: 1099-K forms must be furnished to recipients by January 31, and mailed to the IRS by Feb. 28 or e-filed to the IRS by March 31
Where: To the IRS and to recipients
Why: To report the gross amount of reportable payments made by a payment settlement entity (PSE) in settlement of payment card and third party network transactions for each calendar year
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