Form 1099-K reports the payments you received for goods or services through payment cards, payment apps or online platforms during the year. Payment apps and online platforms must send one when your payments total over $20,000 in more than 200 transactions, while card processors send one whatever the amount, and you get your copy by 31 January, as of October 2026.
If you sell online, take card payments or get paid through an app, the 1099-K is the form that tells the IRS what came through. It doesn't mean you owe tax on the whole figure. Here's what the IRS says about who gets one and what to do with it.
Who sends a 1099-K, and when
| How you were paid | When you get a 1099-K |
|---|---|
| Customers paid you directly by credit, debit or gift card | From your card processor, no matter how many payments or how much |
| Payment app or online platform (third party settlement organization) | When payments for goods or services total over $20,000 in more than 200 transactions |
| Below the threshold | You may still get one: platforms are allowed to send it for lower amounts |
The issuers send copies to the IRS and to you by 31 January. If you sell on several platforms, you could get a 1099-K from each one. If PayPal is your main platform, my guide to the PayPal 1099-K covers its forms specifically.
The threshold went back to $20,000
You may remember headlines about a much lower limit. The IRS confirmed that the One, Big, Beautiful Bill retroactively reinstated the threshold that applied before the American Rescue Plan Act of 2021. Payment apps and online platforms don't have to file a 1099-K unless the gross amount paid to you exceeds $20,000 and the number of transactions exceeds 200. Both tests have to be met.
The point most sellers miss: the threshold only decides whether the form is sent. It has nothing to do with whether your income is taxable. The IRS is blunt that you must report your income whether or not you get a 1099-K, including goods you sell, personal items sold at a gain and services you provide.
What doesn't belong on a 1099-K
Payments from friends and family as a gift or to repay a personal expense shouldn't be reported on a 1099-K and aren't taxable income. The IRS gives examples like sharing the cost of a car ride or meal, birthday or holiday gifts, or a roommate paying you back for rent. Mark those payments as non-business in the app when you can.
Where the 1099-K goes on your return
| Your situation | Where the IRS says to report it |
|---|---|
| Gig worker, freelancer, hobby seller or other self-employed | Schedule C (Form 1040) |
| Partnership | Schedule E (Form 1040) |
| Rental income | Schedule E or Schedule C |
| Personal item sold at a gain | Form 8949 and Schedule D |
| Personal item sold at a loss | Top of Schedule 1 (Form 1040), or Form 8949 carried to Schedule D |
If you're not sure whether your selling counts as a business, read my guide on hobby vs business rules first, because it changes which line you use.
The personal items rule that saves people tax
Clearing out the house on a resale app can trigger a 1099-K. A personal item is something you owned for personal use, like a car, furniture, jewelry or a refrigerator. If you sold it for less than you paid, there's no tax to pay, and while the loss can't be deducted, you can zero out the reported amount so you aren't taxed on it. If you sold some items at a gain and some at a loss, report the gains and losses separately. My guide to eBay taxes walks through how that works for resellers.
Records to keep alongside the form
The IRS says to use the 1099-K with your other records to work out your income, not on its own. Those records can include reports from payment apps or online platforms, payment card receipts and merchant statements. They matter most in three cases the IRS describes: when the gross amount includes payments that aren't yours alone, when a business changes hands partway through the year, and when a business changes structure, for example from a sole proprietorship to a partnership, but keeps using the same card terminal. In each case the 1099-K won't match the return, and your records are what show the correct split.
What to do if your 1099-K is wrong
- Check your name, taxpayer identification number and the gross amount against your own records.
- Contact the issuer named as Filer in the top left corner and ask for a corrected form. If you don't recognize the issuer, contact the payment settlement entity at the bottom left.
- If it reports personal payments like gifts, ask for a corrected form showing zero.
- Keep copies of the original, the corrected form and every message with the issuer.
- Don't contact the IRS to fix it: the IRS says it can't correct a 1099-K.
- File on time anyway, even if the corrected form hasn't arrived.
One more case the IRS flags: if you report business income on Form 1120, 1120-S or 1065 but the 1099-K carries your personal name and number, you need the form corrected so it matches the business.
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My verdict
The 1099-K causes more panic than it deserves. The $20,000 and 200 transactions threshold only decides whether a form arrives, not what's taxable, and the gross figure isn't your profit. Keep records of what you paid for things, tag personal payments as personal, and report business sales on Schedule C whether or not a form turns up.
Frequently asked questions
What is Form 1099-K?
A report of payments you received for goods or services through payment cards, payment apps or online platforms during the year.
What is the 1099-K threshold?
As of October 2026, payment apps and online platforms must send one when payments total over $20,000 in more than 200 transactions. Card processors send one at any amount.
Do I pay tax on everything shown on my 1099-K?
No. It shows gross payments. You report your actual income, and personal items sold at a loss aren't taxed.
When will I get my 1099-K?
Issuers must send your copy by 31 January.
Are payments from friends and family reported on a 1099-K?
They shouldn't be. Gifts and repayments of personal expenses aren't taxable income.
Who fixes a wrong 1099-K?
The issuer named as Filer on the form. The IRS says it can't correct a 1099-K.
