Questions About 1099-K Form for the 2023 Tax Year
What is a Form 1099-K?
Form 1099-K is a tax form used to report transactions taking place within payment networks to improve tax compliance. Form 1099-K is provided to the IRS (and to some states) to report certain payments sent or received within third-party settlement organizations.
We are required to issue 1099-K forms to individuals and businesses with Online Payments accounts who received payments that exceed certain federal or state reporting thresholds.
Who is eligible for a Form 1099-K?
For the tax year 2023, we will report 1099-K forms for all individuals and businesses who receive more than $20,000 in payments from over 200 transactions during that calendar year (based on the federal threshold).
I thought the federal threshold was decreasing to $600 for the 2023 tax year. What changed?
On November 21, 2023, the IRS announced that they would use the 2023 tax year as another transition year for the threshold change. For the 2023 tax year, the previous threshold applies ($20,000 in payments from over 200 transactions).
Beginning in tax year 2024, if an organization or individual receives payment for goods and services of $5,000 or more through a third-party payment network, the payment network will report that organization’s or individual’s income on Form 1099-K. The $5,000 threshold will be aggregate and does not depend on the number of payments received.
How do I learn more about this form?
Please visit the IRS’s website for more specific information about understanding your Form 1099-K.
What information will be reported in my 1099-K Form?
The Form 1099-K requires that we report the gross receipts from transactions made through your Online Payments entity during the calendar year. The gross amount reported on your Form 1099-K may not be the actual reportable amount on your tax return. Use this form in conjunction with other records (bank statements, invoices, etc.) to report taxable income, if any. Please consult your tax advisor to determine your tax reporting requirements.
The amounts reported in my 1099-K Form don't match my transaction records. Why so?
We report only the transactions received through our platform using Online Payments. We do not and cannot aggregate all transactions you may have conducted through using different payment methods. Those transactions will need to be reported separately.
What if the payment I received should not be considered taxable income?
The IRS regulations do not require that payment service entities report or determine what is taxable income. Rather, we are required to report gross payments received on our platform in your Form 1099-K. This form should be used in conjunction with other records (bank statements, invoices, etc.) to report taxable income, if any. Please consult with your tax advisor to determine your tax reporting requirements.
I accidentally registered my Online Payments account under my personal name instead of the business that received the payment. How do I update my information?
Please contact our Support Team to get further assistance.
I believe the numbers reported in my 1099-K are inaccurate. How do I make changes?
If you believe the amounts reported in the 1099-K are inaccurate for the taxpayer listed on the form, please contact our Support Team to get further assistance.
I believe I am the victim of identity theft. What should I do?
Please contact our Support Team via email immediately. If an account has been created in your name, you will need to work with them to deactivate your account and provide evidence that you are not the user who created the account.
Can you help me fill out my tax return?
While we provide as much information as possible to help you understand your Form 1099-K, we cannot assist with your tax return or provide advice on your tax situation. Please consult with your tax advisor to determine your tax reporting requirements.
What do I do if I or my end users receive a Form 1099-K?
Both the federal and state Form 1099-Ks are information returns and the gross payments reported on a Form 1099-K do not necessarily represent reportable income. The form should be used in conjunction with other tax records (bank statements, invoices, etc.) to determine your or your users’ taxable income.
Are there any other tax forms that can be filed to the IRS by your system?
The only tax form issued by us to users on our platform is Form 1099-K. Please consult your tax advisor to determine whether any additional tax reporting may be required for your specific business model.
This article is neither legal advice nor tax advice. We recommend that you speak to your tax advisor with any questions or concerns about tax reporting.
Last updated:
Jan. 12, 2024