Form 1099-K reports the payments you received through a payment card or a third-party network such as a payment app or online marketplace. It is the form that tends to surprise people, especially casual sellers who get one for the first time.
The federal reporting threshold for third-party networks is now more than $20,000 and more than 200 transactions. This guide explains who gets a form, what the numbers on it mean, and how to report it whether you sell as a business, sell the occasional personal item, or received a form you should not have. Self-employed? Our gig worker tax guide and Etsy seller guide cover the wider tax picture.
| Who pays you | When they must report | Source |
|---|---|---|
| Payment app or online marketplace (third party settlement organization) | Payments exceed $20,000 and the number of transactions exceeds 200 | IRC section 6050W(e) as amended by Public Law 119-21 section 70432; Instructions for Form 1099-K |
| Payment card processor (credit and debit card payments) | No minimum; a form is issued regardless of the amount | IRS: Understanding your Form 1099-K |
You may still receive a form below those figures. Your state may set a lower reporting threshold for payment apps and marketplaces, which can produce a Form 1099-K even when you did not reach the federal threshold. The form is sent to you by January 31.
For context, the separate threshold for Form 1099-NEC and 1099-MISC payments from businesses rose to $2,000 for payments made after December 31, 2025; our 1099 reporting threshold guide covers that. Form 1099-K also has a new box 1c for cash tips under Public Law 119-21 section 70201.
All income, no matter the amount, is taxable unless the tax law says it is not, even if you do not get a Form 1099-K. Getting a form does not by itself mean you owe tax on every dollar on it, and not getting one does not make the income tax free. The form is a report of gross payments, not a statement of profit.
Box 1a shows the gross amount of payments. It does not include adjustments for fees, credits, refunds, shipping, cash equivalents or discounts. The IRS says these items are not taxable income and you can deduct them from the gross amount.
A seller receives a Form 1099-K showing $23,500 in gross payments. During the year, the platform took $2,100 in fees, $900 was refunded to buyers, and $1,400 went on shipping charges. Working from the gross amount:
| Step | Amount |
|---|---|
| Gross payments on the form (box 1a) | $23,500 |
| Less platform fees | -$2,100 |
| Less refunds to buyers | -$900 |
| Less shipping | -$1,400 |
| Income before other business costs | $19,100 |
The remaining amount goes on the right form for your situation (see below), where other business costs such as the cost of goods are handled. Keep records that tie the form's gross amount to these adjustments.
| Your situation | Where it goes |
|---|---|
| Gig worker, freelancer, hobby seller or other self-employed person (sole proprietor) | Schedule C (Form 1040), Profit or Loss from Business |
| Rental income | Schedule E or Schedule C |
| Sold a personal item at a gain | Form 8949 and Schedule D (Form 1040) |
| Sold a personal item at a loss | Zero out the gross amount: report it at the top of Schedule 1 (Form 1040) or on Form 8949 (which carries to Schedule D) |
Partnerships and corporations report the payments on their own business returns; check the IRS page for the exact form.
If you made a profit on a personal item, the profit is taxable and you report the gain on Form 8949 and Schedule D. A loss on a personal item cannot be deducted, but you can zero out the reported gross income so you do not pay taxes on it. If you sold items for less than you paid, there is no tax liability, and the IRS describes two ways to report it: at the top of Schedule 1, or on Form 8949.
| Example | Sold for | Paid | Result |
|---|---|---|---|
| Used couch | $300 | $800 | Loss of $500: not deductible; zero out the $300 so it is not taxed |
| Collectible | $350 | $200 | Gain of $150: report on Form 8949 and Schedule D |
If you sold a mix of personal items at a loss and a gain, report losses and gains separately.
Gifts and repayments from friends and family should not be reported on a Form 1099-K and are not taxable. If a payment app lumped them in, ask the issuer for a corrected form.
Form you should not have received: ask the issuer for a corrected Form 1099-K that shows a zero amount, and keep copies of your request. Do not wait to file; file on time even if you do not yet have the corrected form.
Wrong gross amount: do not contact the IRS, because it cannot correct your Form 1099-K. Report the amount from the incorrect form in the entry space at the top of Schedule 1 (Form 1040) and make the adjustment, then contact the issuer for a corrected form.
If your 1099-K income is self-employment income, you may need to make estimated payments during the year; see our quarterly estimated tax guide. Keep monthly statements from every platform, because they let you reconcile the form with fees and refunds, and keep the receipts that support your deductions. Our self-employment deductions guide lists common ones.
The IRS pages behind this guide: Understanding your Form 1099-K, What to do with Form 1099-K and the Form 1099-K FAQs.