Does anyone know why PayPal doesn’t report credit card sales for any amounts and number of transactions on a 1099-K?
PayPal supports both card transactions (“PayPal Here”) and third-party payment network transactions.
Per IRS website, the reporting requirement for 1099-K:
You should receive Form 1099-K by January 31st if, in the prior calendar year, you received payments:
Case 1: From payment card transactions (e.g., debit, credit or stored-value cards), and/or
Case 2: In settlement of third-party payment network transactions above the minimum reporting thresholds of –
· gross payments that exceed $20,000, AND
· more than 200 such transactions
However, per PayPal’s website they only report a 1099-K for Case 2:
How does PayPal report my sales to the IRS? Will I receive a tax Form 1099-K?
PayPal will track the payment volume of your account(s) to check whether your payment volume exceeds both of these levels in a calendar year:
- $20,000 USD in gross payment volume from sales of goods or services in a single calendar year
- 200 payments for goods or services in the same year
Based on the IRS website, I would have expected PayPal to report all credit card transaction, even if just $10 and 10 transactions.
