Form 1099-K: Payment Card and Third-Party Network Transactions

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Use Form 1099-K to report payments for goods and services processed through payment cards and third-party networks.

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If you received payments for goods or services through credit cards, debit cards, payment apps, or online marketplaces during the tax year, you may receive Form 1099-K. Like other Forms 1099, it reports information the Internal Revenue Service uses to verify income reported on tax returns. Form 1099-K reports the gross amount of payments processed on your behalf, but receiving a Form 1099-K doesn’t necessarily mean every dollar reported is taxable.

For example, if you sold a personal item for less than you originally paid, you generally don’t owe tax on the sale even if you receive Form 1099-K.

Money received as a gift or reimbursement for a personal expense (such as a friend paying you back for dinner) isn’t taxable. When using payment apps such as Venmo or PayPal, choose the personal payment option for gifts and reimbursements rather than payments for goods or services to help prevent those transactions from being reported on Form 1099-K.

Use Form 1099-K together with your own records when preparing your federal income tax return. The form reports gross payments, not your profit, so business owners generally need to subtract deductible business expenses to determine taxable income. If you sold personal property, keep records showing what you originally paid for the item in case you need to determine whether any part of the sale is taxable.