Everything you need to know about Form 1099-K

Key takeaways

• Form 1099-K is an IRS information return used to report payment card transactions and third-party network transactions (payments for goods or services through payment apps or online marketplaces).
• Getting a 1099-K doesn’t mean you automatically owe tax, and not getting one doesn’t mean the income isn’t taxable—you still need to report your taxable income accurately.
• Federal 1099-k reporting rules changed again for the 2025 tax year: the IRS says the threshold for third-party settlement organizations reverted to $20,000 and 200+ transactions under recent legislation.
• Use pdfFiller to fill out, securely share, and store your 1099-K and supporting records—especially when you need to explain fees, refunds, or personal transactions to your tax preparer.

Tax season can be confusing, especially when new forms arrive in your inbox or mailbox. If you accept payments through apps or online marketplaces, you might receive the IRS Form 1099-K: Payment Card and Third Party Network Transactions. This guide breaks down everything you need to know about 1099-K reporting and how to prepare it with pdfFiller so you can file your return with confidence.

What is an IRS 1099-K form, and when do I get one?

The IRS Form 1099-K (Payment Card and Third Party Network Transactions) is an information return filed by a payment settlement entity (PSE) to report reportable payment transactions made to a payee during a calendar year. A reportable transaction can be a payment card transaction or a third-party network transaction.

A payment settlement entity—typically a bank or a third-party payment organization—sends this form to you and the IRS. It lists the gross payment amount you received during the tax year (Box 1a). It does not account for fees, refunds, or chargebacks; it simply shows the total volume of money processed.

If you’re curious about other types of Form 1099 and how they differ, explore our comprehensive guide to Form 1099 and its types.

What does 1099-K reporting include?

Form 1099-K covers two main types of transactions:

1. Payment card transactions: This includes any payment made via credit card, debit card, or stored-value card (gift card). There is no minimum threshold for these; if you accept credit cards, you will likely get a form.
2. Third-party network transactions: This covers transfers made through payment apps or online marketplaces for goods and services.

However, Form 1099-K excludes many common adjustments, including:

• payment processor fees
• refunds and credits
• shipping
• discounts

These items can affect your gross receipts and net income, and many are not taxable income on their own.

Who receives 1099-K?

You will generally receive a Form 1099-K if you accepted payments for goods or services through a payment processor or online platform, including:

• Online marketplaces (eBay, Etsy, Poshmark, and Amazon)
• Payment apps (PayPal, Venmo, Cash App, and Stripe)
• Gig economy platforms (Uber, Lyft, and DoorDash, though some may use other 1099 forms depending on the specific arrangement)
• Ticket exchange sites (StubHub or Ticketmaster resale).

If you’re a sole proprietor or independent contractor, these forms are common. The platform, as a payment processor, tracks your earnings and must report them to the IRS if certain criteria are met.

The key point is the purpose of the payment. These organizations should issue 1099-Ks for goods or services transactions, not for personal payments like gifts or reimbursements. If your form includes personal payments from family, that can trigger a mismatch that you’ll need to address.

Personal vs. business transactions: why classification matters?

One of the biggest concerns with third-party payment processors is mixing personal and business funds.

Personal payments are not taxable. If a friend sends you money for pizza via Venmo, or your roommate sends their share of the rent via Cash App, this is not income. That’s why platforms often ask you to designate a transaction as

• Goods or services (business income; usually reportable), or
• Friends and family (personal transactions; usually not reportable)

Only transactions marked as “Goods and Services” should trigger a 1099-K payment report. If you accidentally receive one for gifts or personal reimbursements, you aren’t required to pay taxes on that money. However, you must explain the error on your tax return to prevent any IRS discrepancies.

Business income, on the other hand, is fully taxable. This includes profits from selling handmade items, consulting fees, or reselling concert tickets. The IRS looks for this income on your return.

Is IRS 1099-K accompanied by another form?

Form 1099-K must be filed with the IRS Form 1096.  Many companies still produce a 1099-MISC form that was used before the implementation of the 1099 K.  You should keep detailed records so you can deduct any payments that may also have been reported on the 1099-MISC.

Report your 1099-K payments on Schedule C on a separate revenue line.  You can check you total business income by comparing the total revenue on Schedule C to your profit and loss statement from your own accounting system.

What are the updates for the 2025 reporting threshold?

If you’ve heard about the 1099-K $600 threshold, you’re not alone. The threshold has been the subject of multiple delays and updates. Historically, the threshold was high: 200 transactions AND $20,000 in gross payments. However, the American Rescue Plan Act changed this to close the “tax gap.”

As of the IRS’s October 23, 2025 update, the IRS states that legislation reinstated the pre-ARPA threshold so that third-party settlement organizations are not required to file Forms 1099-K unless:

• The gross amount exceeds $20,000, and
• The number of transactions exceeds 1099-K.

Why you might still get a 1099-K under $20,000

Even with the reverted federal threshold, you might still get a form if:

1. State rules are lower.
2. The payments were processed as payment card transactions, which follow different reporting rules than “third-party network transactions.”
3. Your platform did backup withholding (certain withholding scenarios can trigger filing regardless of totals, depending on the situation).

How do you report 1099-K on a tax return?

Knowing how to report 1099-K income correctly is critical to avoiding IRS notices. The specific place you report this depends on why you received the money.

For sole proprietors and independent contractors

If you are self-employed or running a business, you will report this income on Schedule C (Form 1040), Profit or Loss from Business.

1. Take the gross payment amount from Box 1a of your 1099-K.
2. Include this in your gross receipts or sales on Part I of Schedule C.
3. Deduct business expenses (fees paid to the payment app or online marketplace, shipping, cost of goods sold) to determine your net profit.

For tips on managing taxes as a small business owner, check out our comprehensive guide to small business taxes.

For personal items sold at a loss

If you sold personal items (like old furniture or clothes) for less than you originally paid, that is not taxable income. However, if you receive a 1099-K for it, you still need to report it so the IRS knows why you aren’t paying tax on it.

• You report the gross proceeds on Schedule 1 (Form 1040), Part I, line 8z (Other income).
• You then list the same amount as a negative adjustment on Schedule 1, Part II, line 24z, to zero it out.

For personal gains (hobbies or investments)

If you sold a collectible for a profit but aren’t a business, this may be reported as a capital gain on Form 8949 and Schedule D.

Do I have to pay taxes on 1099-K?
You pay taxes on the profit, not the gross amount. This is why accurate record-keeping of your cost basis (what you paid for the item) and fees is vital.

What to do if your 1099-K is incorrect

Sometimes, a payment card processor makes a mistake, reporting payments that were actually personal transactions or duplicate income.

If the information reported is wrong:

1. Contact the issuer (a telephone number should be in the top left corner of the form) and request a corrected form.
2. Save bank statements and transaction logs that prove the error.
3. If you cannot get a Form 1099 correction in time, file your taxes with the correct amounts. Strict explanations may be required.

State-specific 1099-K requirements

Federal rules aren’t the only ones that matter. Several states set their own $600 reporting thresholds long before the federal changes were proposed.

For example, PayPal publicly lists lower thresholds in certain states, including:

• $600 in Vermont, Massachusetts, Virginia, and Maryland
• Illinois: over $1,000 and four or more transactions.

If you sell across multiple states or run a high-volume marketplace, state-by-state thresholds are a governance issue—not just a tax prep task. Establish a calendar-based compliance review and confirm your payment processor’s current guidance each year.

How can pdfFiller help with Form 1099-K reporting and tax documentation?

When handling IRS forms, security is essential. pdfFiller keeps your data safe with SOC 2 Type II and GDPR compliance, 256-bit encryption, two-factor authentication, and password protection. Complete and send tax forms to your accountants and tax consultants confidently, knowing your information is secure.

How pdfFiller fits in a 1099-K workflow

• Find the necessary templates: Get the correct Form 1099-K version and instantly upload it to the editor.
• Fill out forms accurately: Type directly onto the IRS PDF form to ensure your individual income tax return is legible.
• Securely share the form: Share documents with internal stakeholders or external tax preparers via email or secure links.
• Go paperless: Store your tax reports in a secure cloud storage so you never lose them.

Using pdfFiller to prepare 1099-K documents: Step-by-step guide

Using pdfFiller is an efficient solution for managing tax reporting paperwork. Complete the following steps to get your 1099-K blanks ready in minutes:

1. Log in to your pdfFiller account or create it and start a free trial.

2. Click Add new, navigate to the form library, and click Get Form to upload the fillable 1099-K PDF template.

3. The IRS form will automatically open in the editor. Read the instructions on pages 1 and 5.

4. Use the editing toolbar above to accurately fill out blank fields.

pdfFiller’s user-friendly editor provides all the tools you need to edit and manage documents efficiently.

5. Click Text to fill out blank fields: provide both Filler’s and Payee’s taxpayer identification numbers, enter their names, and contact details.

6. Click Check to select the corresponding checkbox for the reported transaction type and if the Filler is PSE, EPF, or a third party.

7. Ensure all document copies are completed accordingly (Copy A, 1, B, and 2) and click Done to finish.

8. Access the completed document whenever needed in your pdfFiller storage for further filing.

A detailed view of IRS Form 1099-K, displayed within the pdfFiller user-friendly interface, where you can easily fill out all fields online.

Final thoughts

Form 1099-K is a reporting tool, not a verdict. When you understand what it includes (and what it doesn’t), you can report the right income, avoid double-counting, and reduce the risk of IRS notices driven by mismatched totals.

If you want a simpler way to organize your tax records and securely share your documentation, start a free trial with pdfFiller and build a repeatable 1099-K documentation workflow before your next filing deadline.

Glossary

• Payment Settlement Entity (PSE): An entity, such as a bank or third-party organization (like PayPal), that processes credit card or digital payments and is responsible for reporting those transactions to the IRS.
• Gross Payment Amount: The total dollar amount of transactions processed for you during the year, without deducting fees, refunds, or shipping costs.
• Schedule C: An IRS tax form used by sole proprietors and single-member LLCs to report profit or loss from a business.