The short answer
| What it reports | Payment card transactions. |
|---|---|
| Amounts to report | No threshold at all for payment card transactions. Over $20,000 in more than 200 transactions for payment apps and marketplaces (third party settlement organizations) |
| To the recipient | January 31 |
| To the IRS, on paper | February 28 |
| To the IRS, electronically | March 31 |
If one arrives
Box 1a is not adjusted for fees, refunds, shipping or discounts. Report the gross and deduct those as expenses — netting them first leaves a difference you cannot explain.
The form is how a payer tells the IRS what it paid. Its absence is not permission — income you received is reportable whether or not a form covers it, and a threshold decides only who must file, never what you owe.
If you have to send one
You do not file this. The payment settlement entity does, which is why a card payment must not also go on a 1099-NEC.
Electronic filing is required once you file 10 information returns, counting every type together — eight 1099-NECs and four 1099-MISCs is twelve, not eight.
Who sends it
Form 1099-K comes from the business that moved the money, not from the customer who paid it. The IRS describes it as "a report of payments you received for goods or services during the year" from two kinds of payer:
- Payment cards: credit, debit and stored value cards such as gift cards, through your card processor.
- Payment apps and online marketplaces, which the rules call third party settlement organizations.
That is why a customer who pays you by card never sends you a 1099-NEC for it. The instructions for that form say card and third party network payments "must be reported on Form 1099-K by the payment settlement entity under section 6050W and are not subject to reporting on Form 1099-MISC or Form 1099-NEC." A payment reported on both forms is the same money, and it is income once. Which of the three forms describes your money sets them side by side.
When one is sent
The two kinds of payer follow different rules.
| Paid through | You get a 1099-K |
|---|---|
| A card processor | For any amount. The IRS: "no matter how many payments you got or how much they were for" |
| A payment app or online marketplace | When payments for goods or services total over $20,000 in more than 200 transactions |
The app threshold decides only when a platform must send the form. "They may send you a Form 1099-K with lower amounts and/or transactions," and whether a form arrives or not, the IRS is plain: "you must report all income on your tax return." See your card processor has no threshold and no 1099 arrived.
Gross, before everything
The figure in box 1a is the gross amount, defined as the total "without regard to any adjustments for credits, cash equivalents, discount amounts, fees, refunded amounts, shipping amounts, or any other amounts." It will almost never match the deposits in your bank account, and it is not meant to.
The way to reconcile it is to report the gross as receipts on Schedule C and deduct the rest where it belongs: processor fees as an expense, refunds as returns and allowances, and shipping as a cost. Netting the fees off first leaves a gap between your return and the form that you then have to explain. Your books and your 1099s will not match works through the reconciliation.
Payments that are not income
Not everything a payment app handles is business income. The IRS names three kinds of money that should not be on a 1099-K, or that are not taxable when they are:
- Personal payments from friends and family, as a gift or to repay a shared cost, for example sharing the cost of a car ride or a meal. The IRS: "These payments aren't taxable income."
- Personal items sold at a loss. For 2025 these go in the space at the top of Schedule 1.
- Amounts included in error, which go in the same space.
A personal item sold at a gain is taxable, on Form 8949 and Schedule D. The IRS asks app users to mark personal payments as non-business "when possible," which keeps them off the form in the first place. What the app reports, and what your friends paid you back works through each kind of payment and the fix for a form that mixes them.
The boxes
| Box | What it holds |
|---|---|
| 1a | Gross payment card and third party network transactions |
| 1b | Card not present transactions, such as online and phone sales |
| 1c | Cash tips included in box 1a (new for 2026) |
| 1d | Treasury Tipped Occupation Codes (new for 2026) |
| 2 | Merchant category code |
| 3 | Number of payment transactions, not counting refunds |
| 4 | Federal income tax withheld under backup withholding |
| 5a–5l | Gross amount for each month |
| 6–8 | State information |
The monthly boxes are the most useful for your own records: they let you match the form month by month to your sales records rather than as one annual total.
Common questions
My 1099-K shows more than reached my bank. Is it wrong?
I sold my own furniture at a loss and got a 1099-K. Is that income?
A client paid me by card and also sent me a 1099-NEC. Do I report both?
I made less than $20,000 on an app, but a 1099-K arrived. Why?
Friends paid me back through an app for a shared meal. Is that taxable?
This page is for educational purposes only and does not constitute tax, legal, or financial advice. It covers United States federal reporting. Consult a qualified tax professional about your situation.