If you process payment cards or settle online-platform payments for sellers, Form 1099-K is one of those filings you want right the first time. This guide walks you through Form 1099-K instructions\u2014who has to file, 1099-K thresholds for 2026 filings, how to handle the key boxes, and the exact 2026 due dates.<\/p>\n
Form 1099-K reports gross payments a business or individual receives through payment card transactions (credit\/debit\/stored-value cards) and third-party network transactions (online platforms\/payment apps).<\/p>\n
If you\u2019re the payment settlement entity (PSE)\u2014either a merchant acquiring entity (for card payments) or a third-party settlement organization (TPSO) (for third-party network payments)\u2014you must file Form 1099-K with the IRS and give a copy to the payee.<\/p>\n
When you file accurately:<\/p>\n
The table below shows when you must file Form 1099-K, based on how the payment was settled.<\/p>\n
| Type of filer<\/th>\n | Federal filing trigger<\/th>\n | Key takeaway<\/th>\n<\/tr>\n<\/thead>\n | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Online platforms \/ TPSOs (third-party network transactions)<\/td>\n | File only when BOTH are true for the calendar year: gross payments exceed $20,000, and transactions exceed 200 (for payments for goods or services).<\/td>\n | Use the calendar year total. Note: States may set lower thresholds. The old federal \u201c$600\u201d rule is not the current TPSO threshold.<\/td>\n<\/tr>\n | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Card processors\/merchant acquirers (payment card transactions\u2014Visa\u00ae, Mastercard\u00ae, etc.)<\/td>\n | No federal minimum threshold. Payment card transactions can be reportable for any amount.<\/td>\n | Even one card payment can mean a 1099-K is required for that payee.<\/td>\n<\/tr>\n | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Backup withholding cases (TPSO)<\/td>\n | If you withheld backup withholding for a payee, you must file Form 1099-K (and Form 945) even if the payee is below the normal TPSO threshold.<\/td>\n | The withholding requirement makes reporting mandatory. Backup withholding is generally 24% when it applies.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Note:<\/b> The filer is usually the Payment Settlement Entity (PSE)\u2014the entity that actually settles the transaction and instructs the transfer of funds into the seller\u2019s account (and in some cases, filers can designate another party by written agreement).<\/p>\n What to report on Form 1099-K (reportable payment transactions)<\/b><\/p>\n Important:<\/b> Form 1099-K reports gross payments\u2014before fees, refunds, shipping, credits, or other adjustments.<\/p>\n What not to report on Form 1099-K<\/b><\/p>\n Tip:<\/b> If your platform supports it, let users label transfers as personal vs. goods\/services before payout. It can save you correction work in January.<\/p>\n Form 1099-K is an annual filing based on the calendar year, which means that you file Forms 1099-K once a year. For 2026 filings (2025 payments), your key due dates are:<\/p>\n You need to report payments based on the transaction date\u2014the IRS treats the dollar amount of each transaction as determined on the date of the transaction, not when funds settle.<\/p>\n Form 8809 can extend your IRS filing deadline for Form 1099-K by 30 days. However, it does not extend the deadline to send payee copies. For recipient copies, there\u2019s no automatic extension\u2014you must request extra time by faxing Form 15397 by the original due date. If approved, you will be granted up to 30 extra days to provide the recipient statements.<\/p>\n Expert Tip:<\/b> Run a mid-December check to flag payees close to your filing triggers (and any state thresholds).<\/p>\n Notes:<\/b><\/p>\n These easy box-by-box instructions will help you file 1099-K more efficiently:<\/p>\n Box 6: state abbreviation You need to file your Forms 1099-K by these deadlines for 2025 payments:<\/p>\n 10-return e-file rule:<\/b> If you\u2019re required to file 10 or more information returns in total during the year (aggregated across applicable return types), e-filing is mandatory unless you have an approved waiver.<\/p>\n Penalties are assessed per return or per payee statement, based on how late you correct or file it.<\/p>\n Important reminder:<\/b> The IRS can assess separate penalties for filing a correct 1099-K with the IRS AND furnishing a correct payee copy on time. For example, missing 1,000 forms at the $340 tier can mean $340,000 in penalties\u2014and that\u2019s before any separate recipient-statement penalties.<\/p>\n Here are some common errors to avoid and what to do instead:<\/p>\n Reporting net instead of gross<\/b><\/p>\n Quick fix:<\/b> Form 1099-K is based on gross payments. Keep processing fees and refunds in your books, not on the form. If you filed net amounts, file a corrected 1099-K.<\/p>\n Personal payments treated as business sales<\/b><\/p>\n Quick fix:<\/b> Use in-app labels so that \u201cpersonal\u201d transfers can be reviewed and corrected by December 31. That keeps non-business payments out of year-end reporting, and you get the correct reportable payment data.<\/p>\n Duplicate reporting<\/b><\/p>\n Quick fix:<\/b> If more than one processor or entity handles payouts, you\u2019ll need to set clear cut-off dates and label ownership so that only the PSE responsible for the payment reports the relevant transaction, and there is no double or missed reporting.<\/p>\n Missing backup withholding<\/b><\/p>\n Quick fix:<\/b> If backup withholding is required (missing TIN), you need to start applying 24% of backup withholding and keep withholding till the payee gives a certified W-9.<\/p>\n Late filings<\/b><\/p>\n Quick fix:<\/b> Use Tax1099 reminders and run a final review early enough to fix rejects, TIN issues, and missing fields before the due date.<\/p>\n Here\u2019s how Form 1099-K thresholds and boxes play out in day-to-day payouts:<\/p>\n Yes. Payment card transactions have no federal minimum threshold, so even very small card payments can be reportable on Form 1099-K.<\/p>\n No. If you pay a contractor through a payment card or third-party network (like PayPal), that payment is generally reported on Form 1099-K by the payment settlement entity and is not reported on Form 1099-NEC by the business that paid the contractor.<\/p>\n Refunds are not shown as a separate line item on Form 1099-K. Form 1099-K reports the gross dollar amount of reportable payment transactions in Box 1a (and monthly gross in Boxes 5a\u20135l) without reducing for refunds, credits, chargebacks, fees, shipping, or discounts. So refunds generally don\u2019t appear on the form at all.<\/p>\n Yes. You may truncate the recipient\u2019s TIN on payee statements (Copy B), typically showing only the last four digits. However, do not truncate the TIN on what you file with the IRS (Copy A).<\/p>\n For TPSOs, the federal reporting threshold is gross payments exceeding $20,000 and more than 200 transactions for the calendar year. Do note that some states may have lower thresholds, and if there was backup withholding, you\u2019ll need to file even below the threshold.<\/p>\n Avoid penalties! File quickly and keep your merchants confident. Import data, validate TINs, and e-file Form 1099-K in minutes.<\/p>\n |