As a small business owner, navigating the landscape of digital payments is essential, whether through platforms like PayPal®, Venmo®, Zelle®, or using credit cards for transactions with vendors and contractors or to cover other expenses. Accepting payments through these channels may also be part of your business operations.Have you ever received a 1099-K form from these platforms or credit card providers? It is important to note that you may now be required to issue these forms too.
Understanding the Purpose of Form 1099-K
The 1099-K form, titled "Payment Card and Third-Party Network Transactions," serves as a report detailing the total gross or unadjusted amount of all transactions processed by Payment Settlement Entities (PSE) to each payee over a year.
What Transactions Qualify?
It's key to remember that IRS reporting obligations only cover payments for goods and services made to businesses. Personal transactions are exempt from this requirement.
Issuance Thresholds for 1099-K
For the 2024 tax year, the IRS plans to introduce a $5,000 threshold as a step towards enforcing the $600 reporting requirement established by the American Rescue Plan (ARP). Third-party settlement organizations (TPSOs) must file a
1099-K form with the IRS and provide a copy to the recipient if the total transactions exceed $5,000 within the year. This applies to many digital transactions, including those made through peer-to-peer payment platforms, digital wallets, online marketplaces, and more.
Who is Responsible for Filing Form 1099-K?
Payment settlement entities (PSEs), which include merchant-acquiring entities for payment card transactions and TPSOs for third-party network transactions, are tasked with this reporting. Merchant-acquiring entities are typically banks or credit card companies that process transactions, while TPSOs are responsible for payments to payees within various online platforms.
Exclusions from Filing Form 1099-K
Certain entities, like Automated Clearing House (ACH) systems, in-house accounts payable departments, and health carriers, do not fall under the TPSO category and are thus exempt from issuing Form 1099-K.
Reporting Requirements for Transactions
All payment card transactions need to be reported on Form 1099-K by merchant-acquiring entities without exception. Meanwhile, TPSOs must report payments exceeding $600 for goods and services as the ARP dictates, with a planned threshold of $5,000 for the 2024 tax year.
1099-K or 1099-MISC or 1099-NEC
Your reporting requirement depends on different factors, including how the payment was tagged and the type of account profile receiving the payment. You should check with the payment processing company to confirm how they classify payments made during the year using their network. Once you have verified that the payments are being reported on the Form 1099-K, you should not issue a Form 1099-NEC or 1099-MISC to report the duplicate payments.
International Payments
Reporting requirements may vary for payments made to offshore accounts outside the United States. It is advisable to consult the IRS website for specific guidance.
Business-Related Payments
Only payments related to the course of business for goods and services need to be reported. Personal transactions, such as gifts or reimbursements among friends and family, should not be reported on Form 1099-K.
Payments via Zelle®
Zelle® operates differently by acting as a messaging service between financial institutions and individuals without settling funds directly. If you pay a contractor $600 or more during the year using Zelle®, you are responsible for issuing a 1099-NEC or 1099-MISC form, not a 1099-K.
When to file Form 1099-K?
Form 1099-K is due to the IRS by Feb 28th if filed by paper, and March 31st if filed electronically. Recipient copies are due by Jan 31st.
If you need to issue a 1099-K, we have the solution!
For your convenience, here are some important tax-filing deadlines for the 2024 tax season:
The IRS moving to a "continuous use" format for certain tax forms (where the full year is not preprinted on the form), and, in respose, the forms we sell are transitioning. Over the coming months, our forms will be gradually adjusted to include a blank "For calendar year" field for the four-digit year to be populated.
Due to some tax software having printing limitations with the calendar year field, the IRS will accept the following values for the 2023 tax season: 23, 2023, 202023.
Please note that the following products have been deleted. Alternatives are suggested where appropriate.
|
Form
|
Description
|
Form Type
|
Alternative
|
|
W2C or 55226
|
W2-C 6-Part Dateless
|
Continuous
|
5313, 5314, 5315, 5316
|
|
X4 or 88884
|
W-2 8-Part Carbonless
|
Continuous
|
98116
|
|
LCAPA or 5197
|
1099-CAP Copy A
|
Laser
|
N/A
|
|
LCAPB or 5198
|
1099-CAP Copy B
|
Laser
|
N/A
|
|
LCAPC or 5199
|
1099-CAP Copy C
|
Laser
|
N/A
|
|
LLTCA or 5190
|
1099-LTC Copy A
|
Laser
|
N/A
|
|
LLTCB or 5191
|
1099-LTC Copy B
|
Laser
|
N/A
|
|
LLTCC or 5192
|
1099-LTC Copy C
|
Laser
|
N/A
|
|
LLTCD or 5193
|
1099-LTC Copy D
|
Laser
|
N/A
|
|
LSAA or 5123
|
1099-LSA Copy A
|
Laser
|
N/A
|
|
LSAB or 5124
|
1099-LSA Copy B
|
Laser
|
N/A
|
|
LSAC or 5125
|
1099-LSA Copy C
|
Laser
|
N/A
|
|
LOA or 5163
|
1099-OID Copy A
|
Laser
|
N/A
|
|
LOA or 5164
|
1099-OID Copy B
|
Laser
|
N/A
|
|
LOA or 5165
|
1099-OID Copy C
|
Laser
|
N/A
|
|
LQA or 5194
|
1099-Q Copy A
|
Laser
|
N/A
|
|
LQB or 5195
|
1099-Q Copy B
|
Laser
|
N/A
|
|
LQC or 5196
|
1099-Q Copy C
|
Laser
|
N/A
|
|
L18CA or 5901
|
1098-C Copy A
|
Laser
|
N/A
|
|
L18CB or 5902
|
1098-C Copy B
|
Laser
|
N/A
|
|
L18CC or 5903
|
1098-C Copy C
|
Laser
|
N/A
|
|
L18CD or 5904
|
1098-C Copy D
|
Laser
|
N/A
|
|
L58ESAA or 5926
|
5498-ESA Copy A
|
Laser
|
N/A
|
|
L58ESAB or 5927
|
5498-ESA Copy B
|
Laser
|
N/A
|
|
L58ESAC or 5928
|
5498-ESA Copy C
|
Laser
|
N/A
|
|
L58SAA or 5133
|
5498-SA Copy A
|
Laser
|
N/A
|
|
L58SAB or 5134
|
5498-SA Copy B
|
Laser
|
N/A
|
|
L58SAC or 5135
|
5498-SA Copy C
|
Laser
|
N/A
|
|
LW9 or 5311
|
W-9
|
Laser
|
N/A
|
|
W-422 or 102022
|
W-4 for 2022
|
Laser
|
N/A
|
|
W-423 or 102023
|
W-4 for 2023
|
Laser
|
N/A
|
|
3921A50 or 3921A
|
3921 Copy A
|
Laser
|
N/A
|
|
3921B50 or 3921B
|
3921 Copy B
|
Laser
|
N/A
|
|
3921A50 or 3921A
|
3921 Copy C
|
Laser
|
N/A
|
|
3921A50 or 3921A
|
3921 Copy D
|
Laser
|
N/A
|
|
3922A50 or 3922A
|
3922 Copy A
|
Laser
|
N/A
|
|
3922B50 or 3922B
|
3922 Copy B
|
Laser
|
N/A
|
|
3922C50 or 3922C
|
3922 Copy C
|
Laser
|
N/A
|
|
3922D50 or 3922D
|
3922 Copy D
|
Laser
|
N/A
|
|
PS814MB
|
14” Blank 1099-MISC w/ backer
|
Pressure Seal
|
N/A
|
|
PS360
|
11” 1099-B Copy B, Z-Fold
|
Pressure Seal
|
N/A
|
|
PS365
|
11” 1099-G Copy B, Z-Fold
|
Pressure Seal
|
N/A
|
|
PS350
|
11” 1099-OID Copy B, Z-Fold
|
Pressure Seal
|
N/A
|
|
PS1240 or 5504
|
14” 1099-R 4-UP
|
Pressure Seal
|
N/A
|
|
PS358
|
11” Printed 1099-S Copy B, Z-Fold
|
Pressure Seal
|
N/A
|
|
PS357 or 5505
|
11” Printed 5498 Copy B, Z-Fold
|
Pressure Seal
|
N/A
|
|
C5650ES25
|
W-2 Kit – 6-Part for 25 Employees with TaxRight Software
|
TaxRight Kit
|
5650ES25
|
|
C5650ES
|
W-2 Kit – 6-Part for 50 Employees with TaxRight Software
|
TaxRight Kit
|
5650ES
|
|
C5645ES25
|
W-2 Kit – 4-Part for 25 Employees with TaxRight Software
|
TaxRight Kit
|
5645ES25
|
|
C5645ES
|
W-2 Kit – 4-Part for 50 Employees with TaxRight Software
|
TaxRight Kit
|
5645ES
|
|
C5650E10
|
W-2 Kit – 6-Part for 10 Employees without software
|
TaxRight Kit
|
5650E10
|
|
C5650E
|
W-2 Kit – 6-Part for 50 Employees without software
|
TaxRight Kit
|
5650E
|
|
C5645E10
|
W-2 Kit – 4-Part for 10 Employees without software
|
TaxRight Kit
|
5645E10
|
|
C5645E25
|
W-2 Kit – 4-Part for 25 Employees without software
|
TaxRight Kit
|
5645E25
|
|
C6103ES25
|
1099-MISC Kit – 4-Part for 25 Employees with TaxRight Software
|
TaxRight Kit
|
6103ES25
|
|
95917 or 6102
|
1099-MISC Kit, 3-Part for 50 Employees
|
1099-MISC Set
|
610225 for 25 Employees
|
|
95919 or 6105
|
1099-MISC Kit, 5-Part for 50 Employees
|
1099-MISC Set
|
610525 for 25 Employees
|
|
NEC6105
|
1099-NEC Kit, 5-Part for 25 Employees
|
1099-MISC Set
|
NEC6105 for 50 Employees
|
|
5644
|
1099-R Kit, 4-Part for 50 Employees
|
1099-R Set
|
564425 for 25 Employees
|
|
95903ES
|
1099-MISC, 3-Part
|
1099-MISC Set
|
95904ES 4-Part Set
|
|
95905ES
|
1099-MISC, 5-Part
|
1099-MISC Set
|
95904ES 4-Part Set
|
|
NEC95905ES
|
1099-NEC, 5-Part
|
1099-NEC Set
|
NEC95904ES 4-Part Set
|
|
95923
|
1099-INT, 3-Part
|
1099-INT Set
|
Buy components separately
|
|
95924
|
1099-INT, 4-Part
|
1099-INT Set
|
Buy components separately
|
|
95923E
|
1099-INT, 3-Part with envelopes
|
1099-INT Set
|
Buy components separately
|
|
95908ES
|
1099-INT, 4-Part with envelopes
|
1099-INT Set
|
Buy components separately
|
|
95933E
|
1099-DIV, 3-Part with envelopes
|
1099-DIV Set
|
95933
|
|
95934E
|
1099-DIV, 4-Part with envelopes
|
1099-DIV Set
|
95934
|
|
95944
|
1099-R, 4-Part
|
1099-R Set
|
Buy components separately
|
|
95946
|
1099-R, 6-Part
|
1099-R Set
|
Buy components separately
|
The IRS has changed the format of some forms for 2023. See the list below for details.
| Form |
Date of Revision |
Change(s) Made |
Reprogramming Necessary?
|
| 1042-S |
12/22 |
Minor verbiage changes on backers, including text additions and deletions, year updates and date changes. |
No |
| 1094-B |
TBD |
2023 forms expected to be released in Q4 |
TBD |
| 1094-C |
TBD |
2023 forms expected to be released in Q4 |
TBD |
| 1095-B |
TBD |
2023 forms expected to be released in Q4 |
TBD |
| 1095-C |
TBD |
2023 forms expected to be released in Q4 |
TBD |
| 1096 |
4/23 |
Checkboxes in Box 6 repositioned and reformatted.
Minor verbiage changes on backers, including text additions and deletions, year updates and date changes. |
Yes |
| 1097-BTC |
2019 |
"20xx" removed from Calender Year Box.
|
Yes |
| 1098 |
1/22 |
"20xx" removed from Calender Year Box. |
Yes |
| 1098-E |
11/22 |
Minor verbiage changes on backers, including text additions and deletions, year updates and date changes. |
No |
| 1098-MA |
2019 |
"20xx" removed from Calender Year Box. |
Yes |
| 1098-T |
11/22 |
Minor verbiage changes on backers, including text additions and deletions, year updates and date changes. |
No |
| 1098-Q |
2019 |
"20xx" removed from Calender Year Box. |
Yes |
| 1099-A |
1/22 |
"20xx" removed from Calender Year Box. |
Yes |
| 1099-B |
12/22 |
Copy C discontinued.
Minor verbiage changes on backers, including text additions and deletions, year updates and date changes. |
Yes |
| 1099-C |
1/22 |
"20xx" removed from Calender Year Box. |
Yes |
| 1099-DIV |
1/22 |
"20xx" removed from Calender Year Box. |
Yes |
| 1099-G |
1/22 |
"20xx" removed from Calender Year Box. |
Yes |
| 1099-INT |
1/22 |
"20xx" removed from Calender Year Box. |
Yes |
| 1099-K |
3/22 |
"20xx" removed from Calender Year Box. |
Yes |
| 1099-LS |
2019 |
"20xx" removed from Calender Year Box. |
Yes |
| 1099-MISC |
1/22 |
"20xx" removed from Calender Year Box. |
Yes |
| 1099-NEC |
1/22 |
"20xx" removed from Calender Year Box. |
Yes |
| 1099-PATR |
12/22 |
Minor border shift to replace year with form name. Added revision date to box and at bottom next to form number.
Minor verbiage changes on backers, including text additions and deletions, year updates and date changes.
"20xx" removed from Calender Year Box. |
Yes |
| 1099-R |
12/22 |
Minor border shift to replace year with form name. Added revision date to box and at bottom next to form number.
Added new box with calender year fill-in.
Moved 2nd TIN not. box to under FATCA box and lowered account number box to align with 2nd TIN not. box.
Minor verbiage changes on backers, including text additions and deletions, and replace wording on form year with current year.
|
Yes |
| 1099-S |
1/22 |
"20xx" removed from Calender Year Box. |
Yes |
| 1099-SB |
2019 |
"20xx" removed from Calender Year Box. |
Yes |
| 5498 |
11/22 |
Minor verbiage changes on backers, including text additions and deletions, year updates and date changes. |
No |
| W-2 |
12/22 |
Minor verbiage changes on backers, including text additions and deletions, year updates and date changes. |
No |
| W-2 VI |
12/22 |
Copy D discontinued.
Minor verbiage changes on backers, including text additions and deletions, year updates and date changes. |
Yes |
| W-2AS |
12/22 |
Copy D discontinued.
Minor verbiage changes on backers, including text additions and deletions, year updates and date changes. |
Yes |
| W-2G |
1/21 |
"20xx" removed from Calender Year Box. |
Yes |
| W-3 |
11/22 |
Minor verbiage changes on backers, including text additions and deletions, year updates and date changes. |
No |
| W-3SS |
12/22 |
Minor verbiage changes on backers, including text additions and deletions, year updates and date changes. |
No |
The IRS has changed the format of some forms for 2022. See the list below for details.
