1099 K Form Payment Card and Third Party Network Transactions
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Prepare e-file IRS 1099 NEC, MISC, INT, DIV, R, A & K for 2021
● File 1099 K Tax Form online & save time along with money.
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What is 1099 K Form Used For?
1099 K is primarily used to report payment card transactions made in a calendar year. Compared  
to other 1099 Forms, this tax form specifically reports the payments made to a contractor via  
credit/debit cards or any third-party networks.
A payment card includes:
● Stored-value cards.
● Gift cards
● Debit/credit cards etc.
Third-party networks include Amazon, PayPal, etc in which third-party authentication is required
to process the payments.
When do you qualify for a 1099 K?
As per the IRS norms, not everyone who uses third-party networks or any payment cards
receives fillable 1099 K form 2021. Instead, a business is qualified to receive an IRS Form 1099  
K if:
● The payments are made to an employee who is not using any payment cards like
credit/debit, stored-value cards, gift cards, etc.
● Any third-party networks those involved to make the payments.
● The individual services processed by the third-party networks exceed $20,000 in a
tax year.
● Individual transactions made exceed $200 in a calendar year.
Apart from the above payments from 2021, the payee must issue 1099 K return if the services  
processed meets 1099 K threshold 2021 i.e., more than $600. These payments are regardless of  
individual transactions
Who sends an IRS Form 1099 K?
Payment Settlement Entity sends a 1099 K Form to the individuals to report the payments made  
through payment cards. If you made payments to contractors using credit/debit/Amazon/PayPal,  
then the PSE sends you an IRS 1099 K Form. PSE is responsible to file tax returns because the  
PSE instructs you to transfer funds to the participating payee account.
A PSE is a domestic/foreign entity, a bank, or an organization committed to making payments to  
participating payee. The participating payee is an individual who accepts payment card or
third-party network transactions.
How to complete an IRS 1099 K?
1099 K reporting requirements are:
Payer & payee details
Provide the payer and payee details like name, TIN, & address in the respective boxes.
Transaction reported checkboxes
Check the first top box if you are reporting payment card transactions. Or else, check the second  
top box if you are reporting third-party network transactions.
Box 1a – Gross payment card/third-party network transactions.
Box 1b – Card not present transaction
Box 2 – Merchant category code
Box 3 -Number of payment transactions.
Box 4 – Federal tax withheld
Boxes 5a-i – Appropriate gross amount for each month in a year.
Boxes 6-8– State Information.
E-file Form 1099 K instructions 2021
Here are the instructions on how to file Form 1099 K online:
● Sign up with an IRS-trusted e-file provider. Or else, log in to the existing e-file
account.
● New users can add the business details.
● Returning users can select the business information for which 1099 K is required.
● Select the “IRS 1099 K” form from the dashboard.
● Fill in the necessary details.
● Recheck the information entered before submitting it to the IRS.
● Transmit the tax returns to the IRS & to the contractor within the key date.
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