1099-K issued in error

Forum|Forum|4 years ago
March 30, 2022
1 reply
21 views

I searched through previous posts but didn't find anything exactly the same.

Received 2 personal payments from family member equaling $2800 - she is tech inept and sent accidentally as goods and services rather than gift to family/friend. Paypal took fees off $2800 and issued us a 1099-K. We have since talked to them and they have refunded the payments (including their fees) to the family member from our account. However, they have declined to issue a corrected 1099 since they claim the payments from family member were received in 2021 but refunded in 2022. Any advice on what to do with this completely in accurate 1099-K?

Thank you in advance!

Best answer by Vanessa A

Yes, that still applies. Unless you created a business to account for the cash you received, there is no way for you to report the money on the 1099K. It is not like the 1099-NEC or other forms. The 1099K is strictly an informational form.

Just keep a copy of the 1099-K and the supporting documentation just in case you are ever questioned by the IRS so you can show it is from family and not a business.

MinhT1

Level 15

You do not need to report this 1099-K on your tax return as this is not business income.

Do not worry. Not all 1099-Ks have to be reported on tax returns.

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aozziecat89Author

Level 2

Thanks for your quick reply.

Does that still apply even though Paypal characterized the payments from our family member as a transaction?

The 1099-K lists the "income" as:

Gross amount of payment

card/third party network

transactions

Vanessa AAnswer

Level 15

Just keep a copy of the 1099-K and the supporting documentation just in case you are ever questioned by the IRS so you can show it is from family and not a business.

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