Form 1099-K: who gets one and how to report it

What Form 1099-K is

Form 1099-K reports the payments you received for selling goods or providing services through a payment card or a payment app or online marketplace. The IRS calls the apps and marketplaces third party settlement organizations, or TPSOs. The IRS says payment card companies, payment apps and online marketplaces must send the form to the IRS each year, and send you a copy by January 31.

The form reports money that passed through the platform, and the IRS says a payment reported on Form 1099-K is not automatically taxable. The main number, Box 1a, is the gross payment amount. It is not adjusted for fees, credits, refunds, shipping, cash equivalents or discounts, which are not income, and taxpayers can deduct those items from the gross amount when including the income on their tax return. The IRS adds that the gross amount does not account for the original purchase price, or basis, of items sold.

Buyers do not get one: you should not receive a Form 1099-K for making purchases. Personal money does not belong on it either: gifts and repayments from friends and family should not be reported on a Form 1099-K.

This page is general information, not tax advice. It describes federal rules. State rules vary, and your state may have a lower reporting threshold. Thresholds and rules were checked against IRS, Etsy and PayPal pages on 2 Oct 2026.

The 1099-K threshold for 2025 and 2026

The 1099-K reporting threshold for payment apps and online marketplaces is over $20,000 in more than 200 transactions. Both parts have to be met. The IRS explains that the One, Big, Beautiful Bill retroactively reinstated the threshold in effect before the American Rescue Plan Act of 2021, and it issued updated FAQs on Oct. 23, 2025.

The same test applies to 2026 payments. The current Form 1099-K is Rev. December 2026, and a note on the form says the year of the revision date is the first year for which issuers are to use the form to report amounts. Its instructions keep the threshold: a TPSO reports only if the calendar year's gross reportable payment transactions exceed $20,000 and the number of transactions exceeds 200.

There is no threshold for payments you take directly by credit, debit or gift card: card processors report any amount, with no minimum, so even $0.01 in card payments should produce a form.

Platforms that can send the form include payment apps, online community marketplaces, craft or maker marketplaces, auction sites, ticket resale sites, crowdfunding platforms and freelance marketplaces. If you sell in more than one place, you could get more than one Form 1099-K.

Do you have to report 1099-K income?

Yes, if it is income. The IRS rule is that all income, no matter the amount, is taxable unless the tax law says it isn't. The 1099-K threshold decides only whether a platform must send a form: the reporting threshold doesn't affect whether payments are taxable or whether a return must be filed.

A seller under the threshold still reports every sale: the IRS says that if you receive payments for selling goods or services, you must report all income on your tax return.

• Income also includes amounts not reported on any form, such as payments you receive in cash, property, goods or digital assets.
• If you sold a personal item at a loss, there is no tax liability, but a loss on the sale of a personal item can't be deducted.

Etsy tax form: does Etsy report to the IRS?

Etsy reports to the IRS once a seller meets the threshold. For US sellers, Etsy says the IRS form 1099-K is used to report your earnings. Etsy's help page states the threshold for the 2025 tax reporting season as $20,000 and 200 sales, and says that if you meet it, Etsy is legally obligated to report your sales and taxpayer information to the US government. Etsy provides the form the following January.

Etsy's 1099-K reports the total gross sales income you received through Etsy Payments from January 1 to December 31. Etsy says gross sales can include all sales, shipping, refunds, card processing fees, sales tax applied using the sales tax tool and canceled orders. So the total is a gross figure, not your profit.

Etsy also lists state thresholds and issues the form to shops based in those states whose sales meet them: Arkansas $2500; District of Columbia $600; Illinois $1,000 and 4 transactions; Maryland $600; Massachusetts $600; New Jersey $1000; Vermont $600; Virginia $600.

• Where to download it: Shop Manager, then Finances, then Legal and tax information, then choose the tax year.
• Paper copy: Etsy says the form is not mailed unless you opt out of paperless delivery by December 31.
• More than one shop: sales across all your shops are combined based on your SSN or EIN. If that total meets a threshold, you get a single 1099-K form for your combined gross income from all your shops.
• Taxpayer details: if you have no valid taxpayer details on file, once sales exceed $500 in a calendar year, the shop is suspended until you add them.

Form 1099-K from PayPal and Venmo

PayPal reports payments for goods and services on Form 1099-K. Its help page says you get one if you receive more than $20,000 and 200 transactions for goods and services in a calendar year, the same federal test the IRS sets, and the page covers Venmo too.

• Backup withholding: PayPal and Venmo issue and file Form 1099-K for any customer who was subject to backup withholding during 2025, regardless of total payments. PayPal says it withheld at 24 percent from certain accounts missing tax information, and that those customers can claim a credit or refund of the backup withholding when they file their own taxes.
• Lower state thresholds: PayPal lists $600 in gross payment volume, regardless of the number of transactions, in Vermont, Massachusetts, Virginia and Maryland, and over $1,000 and four or more separate transactions in Illinois.
• Which state applies: the form is based on your primary address on the last day of the previous tax year.

Etsy's and PayPal's state lists are not the same, and states can change their rules. Check your state revenue department's site for the current figure.

What to do when you get a Form 1099-K

These steps follow the IRS page on what to do with Form 1099-K.

1. Check that the form is yours

   Confirm your name and the payee TIN, which is the last 4 digits of your Social Security number, ITIN, ATIN or EIN. If the form belongs to someone else, duplicates another form or reports personal payments from family or friends, contact the issuer named under "Filer" on the top left corner of Form 1099-K and ask the issuer for a corrected Form 1099-K that shows a zero amount.

2. Compare the gross amount with your records

   Match Box 1a against your own records, which may include reports from payment apps or online marketplaces, payment card receipts or merchant statements. If the amount is wrong, ask the issuer for a corrected form: the IRS can't correct your Form 1099-K.

3. Report on the right form

   Sellers who are gig workers, freelancers, hobby sellers and other self-employed sellers report on Schedule C. The table in the next section lists the form for partnerships, corporations and personal sales.

4. File on time even without a correction

   The IRS says to file even if you can't get a corrected Form 1099-K. If the gross amount is wrong, report the amount from the incorrect form at the top of Schedule 1 (Form 1040), and keep a copy of the form and your correspondence with the issuer.

How sellers report 1099-K income on Schedule C

If you sell goods as a sole proprietor, including as a hobby seller, the IRS says you report Form 1099-K payment information on Schedule C (Form 1040), Profit or Loss from Business. Gross receipts go on line 1, and the instructions for line 1 tell you to check any Forms 1099 you received for business income that must be reported on this line. Refunds you gave customers go on line 2, as sales returns and allowances.

The Schedule C instructions also say to report all income attributable to your trade or business from all sources. That means payments through every platform, cash and card sales, not only the amounts on a 1099-K.

Expenses, cost of goods sold, self-employment tax and estimated tax payments are covered in the related guides.

1099-K vs 1099-NEC

Form 1099-NEC reports nonemployee compensation: money a business paid you for services as someone who is not its employee.

The IRS keeps the same payment off both forms. Its instructions say card payments and third-party network transactions are reported on Form 1099-K by the payment settlement entity and are not subject to reporting on Form 1099-MISC or Form 1099-NEC. So a client who pays your invoice by card or through a payment app should not also report that payment to you on a 1099-NEC.

Where Nation fits

Questions about Form 1099-K