What is Form 1099-K?
199 views | Last modified 6/23/2020 9:51:13 AM EST | Added by TaxBandits Team

Applicable To
94X 1099 W-2 ACA W-4

Form 1099-K has to 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.

In simple words, PSE has to file an information return to the IRS for the reportable payment transactions. Reportable payment transactions can be defined as a payment card transaction or a third party network transaction. 

Send a copy of Form 1099-K to the participating payee, if one of the following criteria is met.

If the participating payee has,

  • Payment transactions history more than 200.
  • Received gross payment exceeding $20000 for the last year

Due date:

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 Exceptions:

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.
     

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