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Level 1

About 1099k received from PayPal

Hi, I just received 1099k from PayPal. My gross number are only 2500. It’s not meet federal minimum requirements for $20000 but I still receive it. I guess it’s because My PayPal address are Illinois.

1:should I only file this only in Illinois?because my W2 and all other documents are in MN. Should I count this as other state income?

2:Since I don’t think it’s self employment.can I file it using free edition? If not. Which CD version should I buy to fill this form?

3 Replies
Expert Alumni

About 1099k received from PayPal

Not exactly. Report the other state income to each state. Credit is given for any tax paid or owed in the other state. The state where the income was earned collects the tax on that income. TurboTax will help sort your income through the interview when the income is entered.


Please see When would I have to file returns in more than one state? for more details.


Form 1099-K is a summary of income received from people who used credit cards. It is considered self-employment income.


While the Free edition or TurboTax Deluxe CD/Download could be used, by purchasing either TurboTax Self-Employed (Online) or CD/Download TurboTax Home & Business, your income as well as all related expenses can be included in the filing. The tax will be calculated on the net income, Income less Expenses. By including the expenses and not just the income, your taxes could be substantially reduced.


Regarding Form 1099-K, PayPal will issue Form 1099-K because there is more than $20,000 or more than 200 transactions processed in one year.


To enter Form 1099-K in the Online or CD/Download version of TurboTax, with the program open

  • Type Schedule C in the search box in the top righthand corner
  • Click the Jump to link 
    •  For TurboTax Online, see: How do I enter a 1099-K in TurboTax Online? 
    • For CD/Download, the Jump will take you directly to the Business tab. After completing the business profile basics,
      • Click on Business income
      • Select Start by General Income and enter Form 1099-K as the description
  • Proceed through the TurboTax interview for the remaining details


Level 2

About 1099k received from PayPal

Would you still use Schedule C if you don’t have a business, and none of the transactions making up the 1099-K are business-related? 

Expert Alumni

About 1099k received from PayPal

No.  Schedule C is only for business income (self-employment) and expenses.   It is either business income, hobby income or the sale of personal items (garage and yard sale type income).  


A Tax Filing Factsheet for eBay Sellers   @mschouten41 

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