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1099-K thresholds and deadlines by tax year

All three rows carry the same threshold on purpose. The One Big Beautiful Bill Act restored the original $20,000-and-200-transaction test retroactively, so it applies from 2022 onwards. The $600 threshold with no transaction count never took effect and is not the rule for any tax year. The figures in this column are the third-party network test; payment card transactions have no de minimis in any year.

Source: IRS, Instructions for Form 1099-K (2026)

What is Form 1099-K?

Form 1099-K reports payments settled through payment cards and third-party payment networks. It is filed by merchant acquirers, payment apps and online marketplaces, and it tells the payee and the IRS the same figure at the same time.

It is a report of money settled, not a statement of income and not a tax return. Nothing is calculated on it. The figure in Box 1a is deliberately a GROSS amount: it is struck before any adjustment for fees, refunds, chargebacks, discounts, cash equivalents or shipping, so it is almost always larger than the sum that reached the payee's bank. That gap is the single most common reason a payee queries the form, and it is not an error.

What it does NOT cover is personal money. Payments between family and friends, reimbursements and gifts are not payments for goods or services and do not belong on this form, whatever app carried them.

When do you need to file Form 1099-K?

That depends on what you are settling, and this is where most of the confusion about this form lives. For third-party network transactions, a third-party settlement organization reports a payee only when the gross payments exceed $20,000 AND the number of those transactions exceeds 200. Both tests, not either one. Exactly $20,000 across exactly 200 transactions is under both.

For payment card transactions there is no de minimis at all. A payment settlement entity reports every participating payee whatever the amount and however few the transactions.

The $600 threshold with no transaction count is the figure most people have heard, and it is not the rule. It was legislated, delayed twice, and then removed retroactively by the One Big Beautiful Bill Act, which restored the original test back to 2022. Anyone working from 2023 or 2024 press coverage has the wrong number for every year, not just this one.

Backup withholding runs alongside these thresholds rather than overriding them. Where a payee has not furnished a taxpayer identification number in the required manner, the backup withholding rules of section 3406 apply to reportable payments, and any tax withheld is reported in Box 4.

Who needs to file Form 1099-K?

Two kinds of filer, with different tests. The table further down this page sets them side by side.

• Payment settlement entities, meaning merchant acquirers that settle payment card transactions. Every participating payee is reported, with no minimum amount and no minimum number of transactions.
• Third-party settlement organizations, meaning payment apps, online marketplaces, community and craft marketplaces and similar platforms. A payee is reported only when both the $20,000 and the 200-transaction tests are met.
• Where two entities both qualify as the payment settlement entity for the same transaction, the one that submits the instruction to transfer funds files the return and furnishes the payee statement. They may designate the other in writing instead, but the obligation comes back to them if the designee does not file on time.
• Personal payments from family and friends are never reported on Form 1099-K, because they are not payments for goods or services.

What goes in each box

Boxes 1c and 1d are new for tax year 2026, and the same trap applies here as on the 1099-MISC: Box 1c holds cash tips, and that amount is ALREADY INCLUDED in the Box 1a gross figure. It is a breakdown, not an addition. Entering it on top of Box 1a reports the tips twice.

Box 1d is the one to watch, because it is the only field in the group that does not take money. It holds a Treasury Tipped Occupation Code identifying the occupation the tips were earned in, up to two of them. A dollar amount entered there is an easy mistake to make, since every field around it takes one.

Boxes 5a through 5l carry the gross amount for each month of the year, and they must add up to Box 1a. A mismatch between the twelve monthly figures and the annual total is worth checking before you transmit, and our validation flags it. Box 3 is the number of payment transactions and deliberately excludes refunds, which matters: counting refunds can push a payee past the 200-transaction test who should not be reported at all.

Box 2 is not a field every filer completes. It holds the four-digit merchant category code the card industry uses to classify the payee, and the IRS instructions say that a third-party settlement organization, or any filer that does not use an industry classification system for its payees, should not complete it. Box 1b is the part of the Box 1a gross settled as card-not-present payment card transactions, where the card was not physically present or its number was keyed into the terminal: typically online, phone or catalogue sales.

What you need before you can file

This is a high-volume form, and the things that go wrong at volume are different from the things that go wrong on a handful of returns.

• The payee legal name exactly as it appears on their tax records, and their taxpayer identification number. Ideally confirmation that the name and number agree with IRS records before you file rather than after.
• The gross annual figure for Box 1a, struck before fees, refunds and chargebacks rather than after.
• The twelve monthly figures for boxes 5a through 5l, reconciled so that they sum to Box 1a.
• The transaction count for Box 3, with refunds excluded.
• The four-digit merchant category code for Box 2, but only if you use an industry classification system for your payees. A third-party settlement organization, or a filer that does not use one, leaves Box 2 blank. Separately, the card-not-present portion of the Box 1a gross for Box 1b.
• Any cash tips for Box 1c with the occupation code in Box 1d, remembering that the tips are already inside Box 1a.
• Any backup withholding for Box 4, and the state identification numbers for the states you are filing into.

Electronic filing: the 10-return rule

A business that files 10 or more information returns in aggregate must file them electronically. The count is every information return type added together rather than per form. In practice a filer of this form is over the line by a wide margin, which is why bulk import and validation matter more here than on any other 1099.

Everything else that changed this year - the restored threshold, the new Box 1c and 1d fields, and what the two tests actually apply to - is summarised at the top of this page and set out in full on our tax year 2026 changes page.

Correcting a 1099-K after you have filed

Corrections come in two shapes and the IRS treats them differently. A wrong amount, a wrong transaction count, or a return filed for a payee who was under both tests, is a Type 1: file one corrected return carrying the right figures with the CORRECTED box ticked.

A wrong taxpayer identification number or a wrong payee name is a Type 2, and it takes two returns rather than one. The first voids the original by repeating the wrong identifying information with zero amounts; the second files the return as it should have been. Doing only half of that leaves the original standing.

At this volume the corrections worth watching for are systematic rather than individual: a gross figure struck net of fees, or monthly totals that do not reconcile, will be wrong the same way on every return in the batch. Correct as soon as you find the error, because the penalty tiers below are measured from the original due date and they are charged per form.

What are the penalties for not filing Form 1099-K?

Two separate penalties apply, and both can be charged on the same form: one for filing late or wrong with the IRS, one for getting the payee copy late or wrong. The amounts below are those for returns required to be filed in 2026. They are adjusted for inflation each year by revenue procedure, so a 2027 filing will carry slightly higher figures.

• Failure to file the correct Form 1099 with the IRS: $60 per form if filed within 30 days late, $130 per form if filed more than 30 days late but by August 1, and $340 per form if filed after August 1 or not filed at all. Intentional disregard raises the penalty to at least $680 per form, with no maximum.
• Failure to provide the payee with the correct Form 1099 statement: penalized on the same tiered schedule under section 6722, with the same $680-per-form floor for intentional disregard.
• The two stack, and they are charged per form. On a form filed in the thousands that arithmetic is the reason to get the batch right before it goes rather than after.
• Annual maximums apply and are lower for businesses with average gross receipts of $5 million or less. A penalty can be waived where the failure was due to reasonable cause and not wilful neglect.

Form 1099-K, box by box

Box 1a is a gross figure and boxes 5a–5l must sum to it. Neither is what the payee banked, which is why a payee often queries the form: fees, refunds and chargebacks are all still inside the number.

Who has to report, and at what

The figures are read as strict inequalities: exactly $20,000 across exactly 200 transactions is under both tests. Where two entities both qualify as the PSE for one transaction, the one that submits the instruction to transfer funds files — unless they agree in writing to designate the other, and the obligation returns to them if the designee does not file.

1099-K Pricing

Volume pricing — each band charged at its own rate

Optional add-ons

Included at no extra cost

• Direct IRS e-filing — no Form 1096 needed, it is a paper transmittal
• Free recipient PDF copies to download and share
• Bulk Excel/CSV import and built-in error validation
• CFSF state filing for participating states
• Secure storage of your filing data for 4 years

1099, 1098, W-2G, 5498 forms share this tier table. Volume tiers are counted per form type within a filing, so a large batch of 1099-K reaches the cheapest band on its own.