IRS Form 1099-K for E-Commerce Sellers
Updated 2026-08-24
IRS Form 1099-K reports certain payments for goods or services. For third-party settlement organizations (payment apps and online marketplaces), the federal reporting threshold is over $20,000 in gross payments and more than 200 transactions. Payment-card processors have no de minimis threshold. Whether or not you receive a Form 1099-K, you must still report income on your tax return.
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Primary sources
This page is grounded in the primary materials below. Rules change, so open the source and confirm the current version before acting.
FAQ
What is the 1099-K threshold for 2024-2026?+
TPSOs must report when total gross payments for goods or services exceed $20,000 and there are more than 200 transactions. A TPSO may still send a 1099-K below those amounts. Payment-card transactions have no de minimis exception.
Do I need to report income even without a 1099-K?+
Yes, all income from e-commerce sales is taxable and must be reported on your federal tax return regardless of whether you receive a 1099-K. The IRS requires you to report all business income. A 1099-K is an information document — the IRS receives a copy, so unreported income may trigger an audit.
How do I handle expenses and cost of goods sold?+
The 1099-K reports gross payments, not net profit. You should deduct allowable business expenses on Schedule C (Form 1040), including cost of goods sold, marketplace fees, shipping costs, advertising, and other business expenses. Keep detailed records of all deductible expenses.
What if my 1099-K amount is incorrect?+
Contact the marketplace or payment processor that issued the 1099-K to request a corrected form. If you cannot get a correction, report the correct amount on your tax return and attach an explanation. Common issues include returns, refunds, and cancelled transactions being included in the gross amount.
Do non-US sellers receive a 1099-K?+
Non-US sellers may receive a 1099-K if they sell through US marketplaces and have US-source income. They may also receive Form 1042-S instead, depending on tax treaty status and whether they provided a W-8BEN form. Non-US sellers should consult a tax professional about their US tax obligations.
How does the 1099-K interact with sales tax collected by marketplaces?+
The 1099-K gross amount typically includes sales tax collected by the marketplace on your behalf. You should not report sales tax collected as income — it can be excluded on your tax return. However, you need to keep records showing the sales tax portion separately from your gross receipts.
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