What is Form 1099-K?
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Last modified 1/3/2023 7:00:43 AM EST |
Added by TaxBandits Team
The IRS Form 1099-K must be filed by the Payment Settlement Entity (PSE) for reporting the gross amount of reportable transactions made in the calendar year. The PSE includes any banks, organizations, or third-party settlement organizations that transfer funds or payments to the payee on behalf of the payee's client.
Who must file?
Every Payment Settlement Entity (PSE) must file 1099-K for each participating payee's reportable payment transactions. Reportable payment transactions include payment card transactions or third-party network transactions.
You must receive 1099-K if one of the following criteria is met:
- You received payments from payment card transactions such as debit, credit, or store-valued cards.
- You received gross payment exceeding $20000 for the past calendar year from the third-party payment network transactions history of more than 200.
The deadline for the PSE to send the Form 1099-K to the payee is January 31 and for paper filing with IRS is February 28. If you e-file Form 1099-K, the deadline will be March 31.
Form 1099-K Exemption
If the PSE has made settlement payments to the offshore accounts, other than the US, there is no need for filing Form 1099-K. Yet, there are some situations where the PSE has to submit this form for offshore payment transactions if at least one of the below conditions apply.
- The participating payee is said to have any US address.
- The PSE is being requested to transfer the settlement amount to the account inside the US.
- The PSE identifies the participating payee as a US resident.