Business taxes support

What is a 1099 form?

 

Forms 1099 are a series of tax forms used by the IRS to obtain information on certain types of non-employee income received by individuals and businesses. Generally, payments for freelancing or independent contracting, investment income, rental or royalty income, or other miscellaneous income are subject to Form 1099 reporting.

 

The payer is responsible for filling out the appropriate Form 1099 and sending it to you. Most Forms 1099 are required to be provided to the payment recipient by January 31.

 

What is a 1099-K form?

 

Form 1099-K is an information return used by payment settlement entities (PSEs) to report the gross amount of reportable transactions for the calendar year to the IRS.

 

Two types of entities qualify as PSEs:

1. Merchant acquiring entities, which report the gross amount of credit card transactions settled for their merchant clients with no minimum threshold.
2. Third party settlement organizations (TPSOs) such as payment apps and online marketplaces which report the gross amount of payments settled through their platforms for their users, with a de minimis reporting threshold

 

Will I receive a 1099-K?

 

You will receive a 1099-K if you accept credit card payments settled by a merchant acquirer (like Chase Paymentech) or payments beyond the reporting threshold from a third-party settlement organization (TPSO) (like WePay).

 

The reporting threshold for TPSOs was set at $5,000 in gross payments for tax year 2024, and at $2,500 for tax year 2025. These thresholds might change as a result of the proposed tax bill that is being considered in Congress, further updates will be published once the bill is final.

What is meant by “gross dollar amount” of payments?

 

The “gross dollar amount” excludes any refunds, fees and chargebacks. It simply reports the gross amount of money your customers originally paid to you in the previous calendar year. It is up to you and your tax professionals to determine what portion of this gross revenue represents taxable income.

 

Will Chase send me a 1099-K to include on my tax returns?

 

Yes, the filing requirement applies to all US-based businesses, including non-profits and other tax-exempt entities.

 

Note that non-US merchants may be required to certify (or re-certify) their foreign status in order to remain exempt from 1099-K reporting and backup withholding. Certification remains in effect for three years.

 

When should I receive my 1099-K form?

 

You should receive your 1099-K by January 31 of the following year. If you have further questions regarding Internal Revenue Code requirements, call us at 1-888-886-8869 or review the updated IRS FAQ here.

 

What identifying information does the 1099-K form use?

 

The IRS mandates that the 1099-K forms we file reflect your company’s IRS filing name and Tax Identification Number (TIN) and not an account administrator name and social security number. Please review your TIN status in the Tax Information Section of your Merchant Services statement to be sure the records match. If this information does not match, your company could be subject to IRS-imposed federal tax withholding on future payment transactions.