Yes, you will need to report this on your tax return, but if you did not have a gain on the payout, it is not taxable income. So when you enter the 1099-K, you will follow the steps below to remove it from taxable income but still report it.
To enter the 1099 K and then back it out immediately take the following steps:
- Income
- 1099-K under Other Common Income
- Enter the information from the 1099-K
- Check the box that says, This amount in box 1a is too high or includes some personal transactions
- Enter the amount that shouldn't be included
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