IRS Form 1099-K for E-Commerce Sellers: Thresholds, Reporting & Tax Filing
Updated 2026-08-03
IRS Form 1099-K is issued by payment settlement entities (including e-commerce marketplaces like Amazon, eBay, and Etsy) to report gross payment transactions to sellers. For tax year 2024 and beyond, the federal threshold is $5,000 in gross payments with no minimum transaction count, though some states have lower thresholds. Sellers must report all income on their tax returns regardless of whether they receive a 1099-K.
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?+
For tax year 2024 and beyond, the federal 1099-K threshold is $5,000 in total gross payments with no minimum transaction count requirement. This is a phased approach from the original $600 threshold set by the American Rescue Plan Act. Some states like Massachusetts and Vermont have lower thresholds.
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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