What is a 1099-K, and does my reselling business get one?
Updated
A Form 1099-K reports payments you received through a payment card processor or a third-party payment network or marketplace. You get one from a card processor no matter how much you were paid. From a payment app or online marketplace, the federal threshold is over $20,000 and more than 200 transactions in a year, though a platform may send one for less. Either way, all your sales are taxable income whether or not you get the form.
Rules have changed several times since 2021. Check IRS.gov for the current year before you file.
What it is
The 1099-K is an information form. The platform sends it to you and the IRS, showing gross payments for the year. Gross means before fees, refunds and shipping, so it can be higher than what you actually kept.
Who sends one
- Payment card processors: per the IRS, your processor sends a 1099-K regardless of how many payments you received or how much they were.
- Payment apps and online marketplaces (third-party settlement organizations): federal reporting applies when payments for goods or services are over $20,000 in more than 200 transactions.
The threshold history, briefly
The American Rescue Plan Act of 2021 lowered the threshold to $600. The One Big Beautiful Bill Act retroactively reinstated the earlier $20,000 and 200-transaction threshold, per IRS guidance (IRS 1099-K FAQs). Platforms may still send forms for lower amounts, and some states set lower thresholds.
Does a reseller get one?
Probably, if you sell through marketplaces or take card payments. Examples: a sneaker or electronics reseller on a marketplace, a Shopify store using a card processor, or a seller paid through a payment app. If you sell mostly by wire or ACH to wholesale buyers, you may get none. That doesn't change what you owe.
What to do with one
- Check the amount. Compare it to your own sales records. It can include sales tax, shipping, and refunded orders.
- Match it to your books. Report your sales on your return, then deduct your costs, including inventory, fees and shipping.
- Fix errors. If the form is wrong, contact the platform for a corrected one.
- Don't ignore a form you didn't expect. The IRS gets a copy.
- Keep records. Our guide on records for inventory purchases covers what to keep for audits.
If you don't get one
The IRS says that no matter the amount of reported payments, if you receive payments for selling goods or services you must report all income. A missing form changes nothing about what you owe.
Where Shield fits
Shield doesn't file or issue tax forms, and this isn't tax advice. Your accountant can say how a 1099-K fits your return. Shield gives resellers a US business account and a business credit card with no upfront or subscription fees, which helps keep sales and purchases separate for your records. Owners can live outside the US, with a US company.
FAQ
Is the $600 threshold in effect? The IRS says the earlier $20,000 and 200-transaction threshold was reinstated for third-party payment platforms. Check IRS.gov for any later change.
Why is my 1099-K higher than my profit? It reports gross payments. Costs, fees and refunds aren't subtracted.
Do I still owe tax if I get no 1099-K? Yes. Report all income from selling goods, whether or not you receive a form.
Next step
To see how Shield supports resellers with accounts, cards and supplier payments, visit Shield business credit cards.