What is a 1099-K used for?

A 1099-K reports the gross payments a payment processor or marketplace settled to you during the year. The IRS uses it to cross-check the income you report. You use it to reconcile against your own books — subtracting fees, refunds, and chargebacks — when reporting business income on Schedule C or a business return.

Who should get a 1099-K?

Anyone who took card payments through a processor like Square or Stripe gets one with no minimum amount. People paid through apps and marketplaces like PayPal, Venmo for Business, Etsy, eBay, or Uber receive one once 2025 gross payments topped $20,000 and 200 transactions, or a lower state threshold. The processor files a copy with the IRS.

What is the difference between a 1099 and a 1099-K?

A 1099-K reports payments routed through a card processor or third-party network and is issued by that processor. A 1099-NEC reports direct nonemployee compensation paid by one business to a contractor. If a client paid you through PayPal, you may get a 1099-K from PayPal instead of a 1099-NEC from the client — report the income once, not twice.

Does the amount on my 1099-K equal my taxable income?

No. Box 1a is the gross amount settled to you before any deductions. It includes sales you later refunded, platform fees, and chargebacks, so it usually overstates your real income. Your taxable profit is what remains after subtracting business expenses, which you calculate from your own records, not from the 1099-K alone.

Do I have to report 1099-K income on my tax return?

Yes, if the payments were for goods or services. You must report that income whether or not you received a form, even if you fell below the reporting threshold. Personal transfers — splitting a dinner bill or a gift from family — are not taxable and should not appear on a 1099-K. If they do, contact the issuer for a correction.

How long should I keep a 1099-K?

Keep it at least 7 years from when you file the related return. It substantiates your reported gross receipts through the IRS audit window — 3 years normally, 6 if income was understated by over 25%. Also keep the fee and refund records you used to reconcile Box 1a to your actual net income.

Tax

Form 1099-K

A Form 1099-K is an IRS information return that reports the gross amount of payment card and third-party network transactions a business or individual received during the tax year. It is issued by payment settlement entities like Stripe, PayPal, Venmo, Etsy, Square, and Uber, showing total payments processed in Box 1a.

For 2025, payment apps and online marketplaces only had to issue a 1099-K once gross payments exceeded $20,000 and 200 transactions — the higher threshold the One Big Beautiful Bill restored. Payment-card transactions have no minimum at all.

Source: IRS — FAQs on Form 1099-K threshold under the One, Big, Beautiful Bill

Written & maintained by the Granite team · Last updated June 2026

Overview

Form 1099-K, Payment Card and Third Party Network Transactions, is filed by payment settlement entities (PSEs) — the credit-card processors, payment apps, and online marketplaces that move money on your behalf. It reports the gross dollar amount they settled to you during the calendar year, before any fees, refunds, chargebacks, or adjustments are subtracted. You receive a copy; the IRS receives a matching copy.

If you sell on a marketplace, run a Stripe or PayPal checkout, drive for a rideshare app, or take card payments through Square, you are the payee. There are two different triggers. Payment-card transactions have no minimum — any amount you process on credit or debit cards generates a 1099-K. Payment apps and online marketplaces (third-party settlement organizations) only had to issue one once gross payments exceeded $20,000 and 200 transactions for 2025, after the One Big Beautiful Bill restored that higher threshold. The form is informational — it does not tell you your taxable profit. The gross figure in Box 1a typically overstates your actual income, because it includes amounts you later refunded or paid in platform fees. You reconcile the 1099-K against your own records when filing Schedule C or a business return.

When you’ll get your Form 1099-K

You accept credit, debit, or prepaid card payments through a processor like Square or Stripe — these have no dollar threshold, so any amount triggers a form
You sell goods or services on a marketplace such as Etsy, eBay, Amazon, or Poshmark
You receive business payments through PayPal, Venmo for Business, or Cash App for Business
You drive or deliver for a platform like Uber, Lyft, or DoorDash
Your gross payments through a payment app or marketplace crossed the $20,000-and-200-transaction federal threshold, or a lower threshold set by your state
You operate a freelance or solo business that takes online or in-app payments

What’s on your Form 1099-K

These are the fields Granite reads and extracts automatically the moment you upload one.

Payer (PSE/EPF) name: The payment settlement entity that issued the form and processed your payments — e.g. Stripe, PayPal, Etsy, Square.
Payer's TIN: The taxpayer identification number of the payment processor that filed the form.
Payee name: You — the business or individual who received the payments being reported.
Payee's TIN: Your EIN or SSN as the recipient; usually shown masked (e.g. XXX-XX-1234).
Box 1a — Gross payment amount: Total dollar value of all card and third-party network transactions settled to you, before fees, refunds, or adjustments. This is the headline number.
Box 1b — Card not present transactions: The portion of Box 1a where the card was not physically swiped, typically online or keyed-in sales.
Box 3 — Number of transactions: The count of separate payment transactions reported, not a dollar amount.
Box 4 — Federal income tax withheld: Any federal income tax the processor withheld, usually only present under backup withholding.

How long to keep it

At least 7 years from the date you file the related tax return

The 1099-K supports the gross receipts you report on Schedule C or a business return, so it must survive the full IRS audit window — generally 3 years, but 6 years if income was understated by more than 25%. Because Box 1a overstates real income, you should also keep the fee, refund, and chargeback records you used to reconcile it; without them you cannot defend the lower net figure you actually reported.

How Granite handles your Form 1099-K

Drop a 1099-K from Stripe, PayPal, Etsy, or any processor into Granite and it reads the form on upload, recognizes it as a 1099-K, and pulls out the payer name, Box 1a gross amount, transaction count, and tax year. It files the form into your Tax {year} collection and links it to the issuing business as an entity, so every processor's form for that year sits together. Search "Stripe 1099" or "payment card" and it surfaces instantly — no folder digging at filing time.

FAQ

Form 1099-K: common questions

What is a 1099-K used for?: A 1099-K reports the gross payments a payment processor or marketplace settled to you during the year. The IRS uses it to cross-check the income you report. You use it to reconcile against your own books — subtracting fees, refunds, and chargebacks — when reporting business income on Schedule C or a business return.
Who should get a 1099-K?: Anyone who took card payments through a processor like Square or Stripe gets one with no minimum amount. People paid through apps and marketplaces like PayPal, Venmo for Business, Etsy, eBay, or Uber receive one once 2025 gross payments topped $20,000 and 200 transactions, or a lower state threshold. The processor files a copy with the IRS.
What is the difference between a 1099 and a 1099-K?: A 1099-K reports payments routed through a card processor or third-party network and is issued by that processor. A 1099-NEC reports direct nonemployee compensation paid by one business to a contractor. If a client paid you through PayPal, you may get a 1099-K from PayPal instead of a 1099-NEC from the client — report the income once, not twice.
Does the amount on my 1099-K equal my taxable income?: No. Box 1a is the gross amount settled to you before any deductions. It includes sales you later refunded, platform fees, and chargebacks, so it usually overstates your real income. Your taxable profit is what remains after subtracting business expenses, which you calculate from your own records, not from the 1099-K alone.
Do I have to report 1099-K income on my tax return?: Yes, if the payments were for goods or services. You must report that income whether or not you received a form, even if you fell below the reporting threshold. Personal transfers — splitting a dinner bill or a gift from family — are not taxable and should not appear on a 1099-K. If they do, contact the issuer for a correction.
How long should I keep a 1099-K?: Keep it at least 7 years from when you file the related return. It substantiates your reported gross receipts through the IRS audit window — 3 years normally, 6 if income was understated by over 25%. Also keep the fee and refund records you used to reconcile Box 1a to your actual net income.

Sources

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