1099-K for Online Sellers: What the Form Means (2026)

Disclaimer: This article provides general information about Form 1099-K for educational purposes only. It is not tax, legal, or financial advice. Tax situations vary widely, and laws change frequently. Consult a qualified tax professional for guidance specific to your circumstances.

That envelope from Etsy or PayPal with "Important Tax Document" on it? That's probably a 1099-K.

Here's what matters: A 1099-K reports your gross payment volume to the IRS. It doesn't tell you what you owe. It doesn't calculate your profit. It just shows the total dollars that flowed through a payment platform.

The number in Box 1a is almost always higher than your actual income. That's normal.

This guide covers when you'll receive one, what the numbers mean, and what to do with it.

What Is a 1099-K Form?

Form 1099-K is an IRS information return titled "Payment Card and Third Party Network Transactions."

Payment platforms send it to sellers who meet certain thresholds. The form reports the gross amount of payments processed through that platform during the calendar year.

According to the IRS, the purpose of Form 1099-K is to improve voluntary tax compliance. When the IRS receives a copy of your 1099-K, they know you received payments. If you don't report income on your tax return, it may trigger questions.

But here's what matters: receiving a 1099-K doesn't create a tax obligation. You're required to report business income whether you get the form or not.

The 1099-K is just a record. What you actually owe depends on your profit after expenses, which the form doesn't show.

When Do Online Sellers Receive a 1099-K?

The federal threshold for issuing a 1099-K is $20,000 in gross payment volume AND more than 200 transactions in a calendar year.

Both conditions must be met. If you had $25,000 in sales but only 150 transactions, you won't receive a 1099-K. If you had 300 transactions but only $15,000 in sales, same story.

This threshold applies per platform. Etsy looks at your Etsy sales. eBay looks at your eBay sales. If you sell on both, each platform evaluates the threshold separately.

Important note: The threshold for receiving a 1099-K is different from your obligation to report income. According to IRS guidelines, you're required to report all business income regardless of whether you receive a tax form. The 1099-K threshold determines when platforms must send you the form, not when you must report earnings.

Some states have lower thresholds. More on that in a moment.

Timeline for Receiving Your 1099-K

Platforms typically send 1099-K forms by January 31 for the previous tax year.

You'll receive it electronically or by mail, depending on your account settings. If your address changed after the tax year ended, update it with the platform as soon as possible.

If you meet the threshold but don't receive your form by mid-February, check your account dashboard or contact the platform's seller support.

What Does Box 1a Mean? (Gross vs Net)

Box 1a on Form 1099-K shows your gross payment amount. This is the total dollar value of all transactions processed, before any deductions.

This number typically includes:

• Customer payments for items sold
• Shipping charges paid by customers
• Sales tax collected
• Refunds and chargebacks (which may be reported differently depending on the platform)
• Transaction fees charged by the platform (which may or may not be included, depending on how payments were processed)

Box 1a does NOT show:

• Your profit
• Your taxable income
• What you actually owe in taxes

The number in Box 1a is almost always higher than your actual income. Sometimes significantly higher.

Example (Illustration Only)

Let's say you sold handmade candles on Etsy last year. Box 1a shows $28,000.

But your actual numbers look like this:

• Gross sales: $28,000
• Cost of supplies: $9,000
• Shipping costs: $3,500
• Etsy fees: $4,200
• Packaging materials: $800

Your profit before other deductions: $10,500

The 1099-K doesn't know about your $17,500 in expenses. It just reports the gross.

When you file your tax return, you report the income and deduct eligible business expenses. That's where your actual tax liability gets calculated.

For more on what online sellers can deduct, see our guide to Etsy seller tax deductions.

Which Platforms Send 1099-K Forms?

Any payment platform or marketplace that processes transactions may send a 1099-K if you meet the threshold.

Common platforms that issue 1099-K forms to sellers:

Each platform calculates the threshold independently. They don't combine data from other platforms.

If you use multiple payment processors, you could receive multiple 1099-K forms for the same calendar year.

What If You Sell on Multiple Platforms?

Each platform reports separately.

If you sold on Etsy, eBay, and Amazon, you might receive up to three different 1099-K forms, each showing the gross payments processed through that specific platform.

The IRS receives copies of all of them.

When you file your tax return, you don't add up all the Box 1a amounts and report that number. Instead, you report your total business income from all sources and deduct your total business expenses.

Your tax software or accountant will help reconcile the 1099-K amounts with your actual income. The forms are informational. Your books are what matter.

Avoiding Double-Counting

Some sellers worry about being taxed twice if they receive multiple forms. That's not how it works.

You report your income once, based on your records. The 1099-K forms are just cross-references the IRS uses to verify you're reporting what you received.

If you have good bookkeeping, reconciling multiple 1099-Ks is straightforward. If your records are incomplete, this is where things get messy.

A tax professional can help if you're unsure how to handle multiple forms.

State 1099-K Thresholds

Some states require platforms to issue 1099-K forms at lower thresholds than the federal requirement.

As of 2026, states with lower thresholds include:

If you live in one of these states, you may receive a 1099-K even if you didn't meet the federal threshold.

The form will still go to the IRS, but it's primarily for state tax reporting purposes.

Important: These lower thresholds determine when you receive the form, not when you're required to report income. Tax filing obligations are separate from 1099-K issuance rules. Consult a tax professional familiar with your state's requirements.

State rules change. Check with your state's department of revenue or a local tax advisor for current requirements.

What If You Don't Receive a 1099-K?

Not receiving a 1099-K doesn't mean you're off the hook for reporting income.

According to IRS guidelines, you're required to report all income from business activities, regardless of whether you receive a tax form.

If you didn't meet the $20,000 and 200 transaction threshold, you still report your income. You just won't have a 1099-K to reference.

Use your own records: bank statements, platform sales reports, payment processor dashboards, and accounting software.

What If You Should Have Received One But Didn't?

If you clearly exceeded the threshold but didn't receive a 1099-K by mid-February, contact the platform.

Possible reasons you didn't get one:

• Your account information is incomplete (missing SSN or EIN)
• Your address on file is incorrect
• The platform made an error
• The form was sent electronically, and you missed the notification

Even if the platform never sends it, report your income accurately. The IRS may still have a copy on file, and underreporting can lead to penalties.

Common 1099-K Mistakes (And What Actually Matters)

"I Only Sold Personal Items, So I Don't Owe Taxes"

This gets complicated. According to IRS guidance, if you sold used personal items for less than you originally paid, you typically don't have taxable income.

But if you received a 1099-K, the IRS knows you got paid. You may need to explain on your tax return why the income isn't taxable.

A tax professional can help document this correctly.

"The 1099-K Amount Is What I Owe Taxes On"

No. Box 1a shows gross payments. Your taxable income is your profit after deducting eligible business expenses.

You might have a 1099-K showing $30,000 but a net profit of $8,000 after expenses. You're taxed on the $8,000, not the $30,000.

"I Didn't Get a 1099-K, So I Don't Need to Report This Income"

Wrong. The 1099-K is for the IRS's benefit, not yours. You report all business income based on your records.

Think of the 1099-K as a cross-check, not a trigger.

"If My 1099-K Is Wrong, I Should Report That Number Anyway"

If your 1099-K has an error (wrong amount, duplicate reporting, etc.), don't just accept it.

Contact the platform that issued it and request a corrected form. They'll send a revised 1099-K if the error is verified.

On your tax return, report your actual income based on your records, not an incorrect form. Keep documentation showing the discrepancy in case of an audit.

"State Thresholds Mean I Have Different Filing Requirements"

The lower state thresholds affect when you receive a 1099-K, not whether you must report income.

If you're in Maryland and received a 1099-K because you exceeded $600, you still report that income the same way you would have without the form.

The threshold is about form issuance, not tax obligations.

Frequently Asked Questions

Do I need to attach my 1099-K to my tax return?

Typically, no. You report your business income and expenses on Schedule C (or the appropriate form for your business type). The 1099-K is for your records and to help you reconcile your income. The IRS already has a copy.

What if my 1099-K shows more than I actually made?

This is common. Box 1a includes shipping, taxes, and potentially fees that aren't income to you. Report your actual income based on your books. Keep records that explain the difference.

Can I get a 1099-K if I only sold a few things?

If you're in a state with a $600 threshold and you sold items totaling more than that amount, yes. Otherwise, you'd need to hit the federal threshold of $20,000 and 200+ transactions.

What happens if I ignore my 1099-K?

The IRS gets a copy. If you don't report income that matches or explains the 1099-K, you may receive a notice asking for clarification. Ignoring tax forms can lead to penalties and interest.

Should I wait for my 1099-K before filing my taxes?

You don't need to. You can file based on your own records. But many sellers prefer to wait until they receive all tax forms to make reconciliation easier.

Do refunds affect my 1099-K?

It depends on the platform. Some reduce the Box 1a amount by refunds issued. Others report gross sales without adjustment. Check your platform's specific reporting method, and keep your own records of refunds to accurately calculate net income.

What if I use PayPal and Etsy, and both send 1099-Ks?

If Etsy Payments was your payment processor, Etsy sends the 1099-K. If you used PayPal for Etsy sales, PayPal might send it. You shouldn't receive two forms for the same transactions. If you do, contact both platforms to clarify.

Do I need a business license to receive a 1099-K?

No. Platforms send 1099-K forms based on payment volume, not your business structure. You can receive one as a sole proprietor without a formal business entity.

How do platforms know my SSN or EIN?

When you set up a seller account, platforms collect tax identification information. If you haven't provided this, they may withhold payments or send you reminders. Make sure your tax info on file is correct.

What to Do with Your 1099-K

If you received a 1099-K this year, here's what to do:

1. Pull your sales reports and compare to Box 1a. Check your platform dashboards and verify Box 1a matches your records. If there's a major discrepancy, contact the platform.

2. Find your receipts and business expenses. Collect receipts, invoices, and documentation for business expenses. The 1099-K shows gross sales. Your profit depends on what you spent.

3. Calculate what platforms actually charged you. The Etsy Fee Calculator and eBay Fee Calculator show exactly what you paid in fees.

4. Consult a tax pro if your situation is complex. If this is your first 1099-K or you have multiple forms, professional help is worth it. A qualified tax preparer or CPA who works with online sellers can save you money and stress.

5. File accurately. Report your actual business income and deduct eligible expenses. Don't just copy the Box 1a number onto your tax return.

The 1099-K isn't something to fear. It's just a record of payments you already know you received. With good bookkeeping and a little help, it's easy to handle.

If you're serious about selling online, staying on top of tax forms is part of the job. Get organized now, and tax season gets a whole lot easier.

Next: Read our Etsy seller tax deductions guide to see what you can write off as a small business owner.