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What is Form 1099-K?

SOLVEDby TurboTax747Updated 4 days ago

Form 1099-K tracks payments you’ve received through a payment settlement entity (PSE) in the past year.

You might receive a 1099-K if:

  • You had more than 200 transactions and more than $20,000 in sales processed through a third-party processor, for any number of transactions.
  • You accepted credit cards, debit cards, or prepaid cards, including gift cards

It includes payments made via:

  • Credit cards
  • Online payment services like Ebay, PayPal, and Venmo
  • Freelancing platforms like Upwork, Etsy, and Facebook that manage client payments
  • Digital platforms which include gig economy services like Uber and Lyft

Form 1099-K reports the gross amount of the transactions, but doesn't include any adjustments for credits, refunds, discounts, or fees.

Example 1: Jo paints landscapes as a hobby and occasionally sells their artwork on Etsy. In 2022, they sell three paintings for a total of $21,600. Jo will receive a 1099-K from Etsy reporting a gross amount of $21,600, since this is income received from selling goods and services. They would receive a 1099-K if there were more than 200 transactions as well. Read more about reporting hobby income.

Example 2: Kris receives a monetary gift via Venmo of $700 from her parents for college graduation. Although Kris received the money through a payment app, they will not be subject to 1099-K reporting since it's a gift, having not been marked or tagged as income for goods and services. 

Example 3: Shane is a full-time student who drives for Lyft a few days per week. In 2022, their gross income from driving for Lyft is $24,000. Shane will receive a 1099-K from Lyft reporting that income. They would receive a 1099-K if there were more than 200 transactions as well.

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