Key takeaways
- Card payments are reported on Form 1099-K with no minimum amount.
- Payments that settle through a payment app or marketplace (a "third party settlement organization") are reported only above $20,000 and above 200 transactions.
- The 2025 tax law applied the $20,000 and 200-transaction test as if the 2021 law had included it. The $600 rule never took effect, and the $5,000 and $2,500 steps no longer apply.
- Each platform looks only at the payments that went through that platform. You can get several forms, or none.
- Box 1a shows the gross amount, before fees and refunds. Your books should show how that figure becomes your actual income.
- Getting no Form 1099-K does not change your tax. You report all business income either way.
Which kind of payment was it?
Form 1099-K covers two kinds of payment. Each kind has its own rule.
| How the customer paid | Who files Form 1099-K | Threshold |
|---|---|---|
| Credit, debit, or stored-value card, through your card processor | The card processor (a "merchant acquiring entity") | None. Every amount is reported. |
| Through a payment app or online marketplace that settles payments to sellers | The app or marketplace (a "third party settlement organization," or TPSO) | Over $20,000 and over 200 transactions in the calendar year |
For cards, the IRS says: "There is no threshold amount that must be met to receive a Form 1099-K due to payments received through a payment card transaction."
For a TPSO, both conditions must be met. Both use "more than," not "or more." A seller with $30,000 from 150 sales on one marketplace does not meet the test there. A seller with $15,000 from 900 sales does not meet the test either.
One processor can send you two forms. The Form 1099-K instructions say a filer that has both card and payment app transactions for the same payee files "a separate Form 1099-K reporting the gross amount from each type."
Will your LLC get a Form 1099-K? Answer four questions
Answer these questions for each company that processed payments for your LLC during the year.
- Did any customer pay you by card through this company? If yes, expect a Form 1099-K for those card payments, whatever the total. Then go to the next question for other payments.
- Did payments settle to you through this company's app or marketplace? If no, this company has nothing else to report on Form 1099-K. If yes, go on.
- Were those payments over $20,000 in total for the year? If no, the company is not required to send a Form 1099-K for them. If yes, go on.
- Were there over 200 of those transactions? If yes, expect a Form 1099-K. If no, the company is not required to send one.
A platform can still send a form below the threshold. The IRS FAQs say a TPSO that backup withheld for a payee must still file a Form 1099-K for that payee and send a copy, even below the threshold.
How the threshold has changed
The $20,000 and 200-transaction test has been in the law since 2011. The American Rescue Plan Act of 2021 lowered it to $600 with no transaction count. The IRS then delayed that change and announced steps of $5,000 for 2024 and $2,500 for 2025.
The One Big Beautiful Bill Act (Public Law 119-21), section 70432, undid that change. The law says its change takes effect "as if included in" the 2021 provision. In an October 2025 news release, the IRS said the law "retroactively reinstated" the earlier threshold. So the $20,000 and 200-transaction test applies to 2025 and 2026, and the $600 rule never took effect.
The threshold for payments you make to contractors is a separate rule. See the 1099-NEC threshold for 2026 if you are the one paying.
What the amount in box 1a includes
Box 1a is not your income. The instructions define the gross amount as the total "without regard to any adjustments for credits, cash equivalents, discount amounts, fees, refunded amounts, shipping amounts, or any other amounts."
The IRS says items like fees and refunds are not taxable income. You can deduct them from the gross amount. Keep the platform's monthly statements, so you can show how the gross amount becomes your sales figure.
Box 3 shows the number of payment transactions. The count leaves out refund transactions.
If you do not get a Form 1099-K
The threshold decides who must send a form. The threshold does not decide what is taxable. The IRS says: "You must report all income you receive on your tax return." The same IRS page adds that this includes payments "not reported on forms, such as payments you receive in cash, property, goods or digital assets."
Platform income also has no tax withheld in most cases. Plan for it with estimated tax payments and the safe harbor for an LLC owner.
If the form is wrong
Contact the company that issued the form, not the IRS. The IRS says: "Don't contact the IRS. We can't correct your Form 1099-K." Ask the issuer for a corrected form, and keep a copy of your request.
Check the name and tax number on the form. The IRS gives one case that applies to many LLCs. If the form shows your name and tax number, but the business files Form 1065, 1120, or 1120-S, you need a corrected form. A multi-member LLC files Form 1065 by default. An LLC taxed as a corporation files Form 1120 or 1120-S. In those cases, the form should show the LLC and its employer identification number (EIN).
Foreign owners
The law generally excludes a payee "with a foreign address" from Form 1099-K reporting. That exception depends on the payee's documents, such as a Form W-8. A U.S. LLC with a U.S. address does not fall outside the rules just because a foreign person owns it. If you are a foreign owner of a U.S. LLC, check what the platform has on file for your LLC.
Some states set a lower threshold
A state can require its own reporting below the federal threshold. Two examples we confirmed on state tax department pages:
- Virginia currently requires a TPSO that paid $600 or more to a Virginia payee to file Form 1099-K with Virginia Tax.
- Illinois requires Forms 1099-K for payees with an Illinois address to be filed with the Illinois Department of Revenue when the payee has 4 or more transactions totaling more than $1,000.
This list is not complete. Check your own state's tax department before you rely on the federal number.
When the forms arrive
The issuer must send your copy by January 31 of the next year. The IRS filing deadline is February 28 on paper or March 31 electronically. A deadline that falls on a weekend or legal holiday moves to the next business day. For 2026 payments, January 31, 2027, is a Sunday, so the recipient copy is due February 1, 2027. February 28, 2027, is also a Sunday, so the paper filing deadline is March 1, 2027.
FAQ
What is the 1099-K threshold for 2026? For payment apps and marketplaces, over $20,000 and over 200 transactions per platform in the calendar year. For card payments, there is no threshold.
Is the 1099-K threshold still $600? No. The 2025 tax law restored the $20,000 and 200-transaction test as if the 2021 law had included it. The $600 rule never took effect.
Do I combine payments from different platforms? Each platform applies the test to the payments that went through that platform. You can get a form from one platform and none from another.
I got no 1099-K. Do I still report the income? Yes. All business income is reported on your return, with or without a form.
Why is the amount on my 1099-K higher than my sales? Box 1a is the gross amount before fees, refunds, shipping, and other adjustments. You can deduct those items, so keep the records that show them.
Sources
- Instructions for Form 1099-K, IRS, accessed 2026-10-13
- Form 1099-K FAQs: General information, IRS, accessed 2026-10-13
- IRS issues FAQs on Form 1099-K threshold under the One Big Beautiful Bill, IRS, accessed 2026-10-13
- IRS announces delay in Form 1099-K reporting threshold (IR-2024-299), IRS, accessed 2026-10-13
- What to do with Form 1099-K, IRS, accessed 2026-10-13
- Understanding your Form 1099-K, IRS, accessed 2026-10-13
- Publication 1099 (2026), General Instructions for Certain Information Returns, IRS, accessed 2026-10-13
- 26 U.S.C. § 6050W, Legal Information Institute, accessed 2026-10-13
- Withholding Tax, Virginia Tax, accessed 2026-10-13
- Publication 110, Forms W-2 and 1099 Electronic Filing Requirements, Illinois Department of Revenue, accessed 2026-10-13
This guide is general information based on the sources listed above, not tax advice. For decisions about your situation, talk to a CPA or enrolled agent.
