Form 1099-K
Payment Card and Third-Party Network Transactions
Payment Card and Third-Party Network Transactions
A 1099-K, “Payment Card and Third-Party Network Transactions”, is a form used in the U.S. to report income received through payment card transactions and third-party network transactions received during the tax year to both the Internal Revenue Service (IRS) and the person or entity who received the income. In recent year, this form has higher visibility as this also includes payments for a personal item you sold or for goods you sell, services you provide. This form is typically used by businesses, merchants, and payment settlement entities. This form is part of the 1099 series, which are used to report various types of income that individuals may receive throughout the year other than salary from an employer. It is an essential document for tax reporting purposes, ensuring that interest income is correctly reported to the IRS.
Per the IRS, a payment settlement entity (PSE) must file Form 1099-K for payments made in settlement of reportable payment transactions for each calendar year. A PSE makes a payment in settlement of a reportable payment transaction; that is, any payment card or third party network transaction, if the PSE submits the instruction to transfer funds to the account of the participating payee to settle the reportable payment transaction.