TaxBandits Knowledge Base

What is Form 1099-K?

The IRS Form 1099-K must be filed by the Payment Settlement Entity (PSE) to report 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 a 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 a 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.
• For the 2024 tax year, you received gross payments exceeding $5,000 from third-party payment network transactions, regardless of the number of transactions.

Due Date

The deadline for the PSE to send  Form 1099-K to the payee is January 31, and for filing the paper with the 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 offshore accounts other than the US, there is no need to file Form 1099-K. However, there are some situations where the PSE has to submit this form for offshore payment transactions if at least one of the conditions below applies.

• The participating payee is said to have a US address.
• The PSE is requested to transfer the settlement amount to an account inside the US.
• The PSE identifies the participating payee as a US resident.