Looking for your 1099-K from Stripe?
If you're not a platform or marketplace and accept payments with Stripe, read more about receiving a 1099-K.
What is a 1099-K form?
The 1099-K is a tax information form generally used to report payments transactions. When using a 1099-K for information reporting, a copy must be delivered to the payment recipient and filed with the IRS.
Who files a 1099-K form?
A Payment Settlement Entity (PSE) is an organization that facilitates payments between parties for payment cards or third party payment networks. There are two types of PSEs:
Merchant Acquiring Entity (MAE) a merchant acquiring entity is a bank or other organization that has the contractual obligation to make a payment to a merchant in settlement of a payment card transaction.
Third-Party Settlement Organization (TPSO an organization that has the contractual obligation to make payments of third party network transactions, often handling payments between someone providing goods/services and the purchaser.
Who receives a 1099-K?
Recipients of a 1099-K are mostly merchants who have received payment using a TPSO or third-party payment network. An Etsy seller, for example, would receive a 1099-K from Etsy. Whether the recipient receives a 1099-K or not, they are still required to include that payment information in their income tax filings.
Beginning January 1, 2022, platforms are required to send 1099-Ks to merchants when the gross amount of total reportable payments exceeds $600 in a calendar year. This change impacts tax reporting for 2022 and subsequent years.
For returns prior to 2022, platforms were only required to send 1099-Ks to merchants when the gross amount of total reportable payments exceeded $20,000 and the total number of such transactions exceeded 200 in a calendar year.
Deadlines and extensions
The deadline to report 2022 tax forms to the IRS through Stripe 1099 is January 24, 2023. This will ensure the forms are filed with the IRS and a copy is sent to the recipients before the IRS deadline of January 31, 2023.
If you were to file independently of Stripe 1099, the deadline to report 2022 1099-Ks to the IRS is February 28, 2023 if paper filing or March 31, 2023 if e-filing and the deadline to provide 2022 tax forms to the recipient is January 31, 2023.
Companies that need more time to file 1099-Ks to the IRS can submit the IRS Form 8809 to apply for an extension. If more time is needed to deliver the 1099-Ks to the recipients, a letter to the IRS is required to explain the reasons for delay. Extensions must be requested before the original due dates.
Read more about extensions here
State filing considerations for 1099-K
Keep in mind that states may also have requirements and separate deadlines for reporting 1099-Ks and filing them. We recommend consulting a tax advisor to determine your state filing requirements.
Mailing vs. e-filing with the IRS
Anyone issuing more than 250 1099 forms is required to e-file with the IRS. Even if fewer than 250 forms are being filed, it is acceptable to e-file.
IRS penalties ranging from $50 to $280 per form may apply for each instance where you:
Don’t file an information return with the IRS by the deadline
Don’t provide the recipient a statement by the deadline
Don’t report a Taxpayer ID (TIN)
Report an incorrect TIN
Report incorrect information
Don’t provide the recipient with all required information
Don’t e-file with the IRS when required to e-file
Larger penalties may be enforced where there is evidence of intentional disregard or neglect.
This article is neither legal advice nor tax advice. We recommend that you speak to your tax advisor with any questions or concerns around tax reporting.