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Department of the Treasury
Internal Revenue Service
Instructions for

Form 1099-K

(Rev. March 2024)
Payment Card and Third Party Network Transactions

Section references are to the Internal Revenue Code unless the contractual obligation to make payment to participating
otherwise noted. payees in settlement of payment card transactions; or a
TPSO, that is, the central organization that has the
Future Developments contractual obligation to make payments to participating
For the latest information about developments related to payees of third party network transactions.
Form 1099-K and its instructions, such as legislation enacted
after they were published, go to IRS.gov/Form1099K. Note. Healthcare networks, in-house accounts payable
departments, and automated clearing houses do not qualify
Reminders as TPSOs and do not report under section 6050W.
In addition to these specific instructions, you should also use A participating payee is any person, including any
the current General Instructions for Certain Information governmental unit (and any agency or instrumentality of a
Returns. Those general instructions include information governmental unit) who accepts a payment card, or any
about the following topics. account number or other indicia associated with a payment
• Who must file. card, as payment or accepts payment from a TPSO in
• When and where to file. settlement of a third party network transaction.
• Electronic reporting.
• Corrected and void returns. A payment card is any card, including any stored-value
• Statements to recipients. card (having prepaid value, including gift cards), issued
• Taxpayer identification numbers (TINs). according to an agreement or arrangement that provides for
• Backup withholding. all of the following.
• Penalties. • One or more issuers of the cards.
• Other general topics. • A network of persons unrelated to each other, and to the
issuer, who agree to accept the cards as payment.
You can get the General Instructions for Certain
Information Returns at IRS.gov/1099GeneralInstructions or • Standards and mechanisms for settling the transactions
between the merchant acquiring entities and the persons
go to IRS.gov/Form1099K.
who agree to accept the cards as payment.
Online fillable Copies 1, B, and 2. To ease statement
furnishing requirements, Copies 1, B, and 2 of Form 1099-K A third party payment network is any agreement or
are fillable online in a PDF format, available at IRS.gov/ arrangement that provides for the following.
Form1099K. You can complete these copies online for • The establishment of accounts with a central organization
furnishing statements to recipients and for retaining in your by a substantial number of providers of goods or services
own files. who are unrelated to the organization and who have agreed
to settle transactions for the provision of the goods or
Reporting of third-party network transactions. For services to purchasers according to the terms of the
returns for calendar years beginning after December 31, agreement or arrangement.
2022, a third party settlement organization (TPSO) is • Standards and mechanisms for settling the transactions.
required to report payments in settlement of third party • Guarantee of payment to the persons providing goods or
network transactions with any participating payee that exceed services (participating payees) in settlement of transactions
a minimum threshold of $600 in aggregate payments, with purchasers pursuant to the agreement or arrangement.
regardless of the number of such transactions. A third party payment network does not include any
Third party reporting. For more information on third party agreement or arrangement that provides for the issuance of
reporting, go to IRS.gov/tax-professionals/third-party- payment cards.
reporting-information-center-information-documents. “Unrelated” means any person who is not related to
another person within the meaning of section 267(b) using
Specific Instructions the rules of sections 267(c) and (e)(3), and 707(b)(1).
A payment settlement entity (PSE) must file Form 1099-K, For more information, go to IRS.gov/newsroom/form-1099-
Payment Card and Third Party Network Transactions, for k-frequently-asked-questions-filing.
payments made in settlement of reportable payment Exception for payments made outside the United
transactions for each calendar year. A PSE makes a payment States by U.S. payers or middlemen to offshore
in settlement of a reportable payment transaction, that is, any accounts after 2010. For payments under contractual
payment card or third party network transaction, if the PSE obligations entered into after December 31, 2010, a PSE that
submits the instruction to transfer funds to the account of the is a person as described in Regulations section 1.6049-5(c)
participating payee to settle the reportable payment (5) as a U.S. payer or U.S. middleman (U.S. payer) is not
transaction. required to file Form 1099-K for payments to a participating
A PSE is a domestic or foreign entity that is a merchant payee with a foreign address as long as, prior to payment, the
acquiring entity, that is, a bank or other organization that has PSE has documentation on which the PSE may rely to treat

Dec 4, 2023 Cat. No. 54721E

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the payment as made to a foreign person according to materially modified on or after January 1, 2011, a PSE that is
Regulations section 1.1441-1(e)(1)(ii) (substituting “payer” for a U.S. payer or U.S. middleman is not required to file a Form
the term “withholding agent” and without regard to the 1099-K for a payment to a participating payee with a foreign
limitations to amounts subject to withholding requirements of address as long as the payer does not know or have reason
chapter 3 of the Code and its regulations). to know that the participating payee is a U.S. person.
A PSE that is a U.S. payer may need to file Form 1099-K A foreign address means any address that is not within the
for payments made outside the United States to an offshore United States (the States and the District of Columbia).
account if any of the following apply. Exception for payments made by non-U.S. payers or
• There is a U.S. residential or correspondence address middlemen to foreign payees. A PSE that is not described
associated with the participating payee. as a U.S. payer or U.S. middleman in Regulations section
• The PSE has standing instructions to direct the payment to 1.6049-5(c)(5) (non-U.S. payer) is not required to file a Form
a bank account maintained in the United States. 1099-K for payment to a participating payee that does not
• The PSE knows or has reason to know that the have a U.S. address as long as the PSE does not know or
participating payee is a U.S. person. have reason to know that the participating payee is a U.S.
A PSE is not required to file Form 1099-K for payments person. If the participating payee has any U.S. address, the
made outside the United States to an offshore account in the PSE may treat the participating payee as a foreign person
circumstances described in the preceding paragraph if the only if the PSE has documentation on which the PSE may
PSE does not know that the payee is a U.S. person and the rely to treat the payment as made to a foreign person
PSE obtains one of the following from the payee: according to Regulations section 1.1441-1(e)(1)(ii).
• An applicable Form W-8; A PSE that is a non-U.S. payer that has reason to know
• Documentary evidence establishing the payee’s non-U.S. but not actual knowledge that a participating payee is a U.S.
status; or person will not be required to file Form 1099-K if the PSE
• A suitable substitute form as described in Notice 2011-71, obtains from the payee a Form W-8 or documentary evidence
available at IRS.gov/irb/2011-37_IRB#NOT-2011-71. that satisfies the requirements described in Notice 2011-71.
The W-8 forms (or the suitable substitutes) must be collected A PSE may accept a substitute form, as described in
by the PSE no later than 90 days after the date on which the Notice 2011-71, in lieu of Form W-8BEN so that a
PSE enters into the contractual obligations with the participating payee can certify its non-U.S. status.
participating payee. The W-8 forms (or suitable substitutes) Documentary evidence, described in Notice 2011-71,
and documentary evidence may be relied upon only when submitted to establish the identity of the payee and the status
the requirements described in Notice 2011-71 are satisfied. of that person as a foreign person remains valid until the
A PSE does not have to file Form 1099-K for payments earlier of the last day of the third calendar year following the
made outside the United States (within the meaning of year in which the documentary evidence is provided to the
Regulations section 1.6049-5(e)) to an offshore account (as withholding agent or the day that a change in circumstances
described in Notice 2012-2, available at IRS.gov/irb/ occurs that makes any information on the documentary
2012-45_IRB#NOT-2012-2) of a participating payee with only evidence incorrect.
a foreign address if the name of the participating payee A U.S. address is any address that is within the United
indicates that it is a per se corporation under Regulations States (the States and the District of Columbia).
section 301.7701-2(b)(8)(i) and the PSE does not know or
have reason to know that the participating payee is a U.S. Nonreportable transactions. The following transactions
person. are nonreportable under section 6050W.
A PSE may apply the grace period rules under • A withdrawal of funds at an automated teller machine
Regulations section 1.6049-5(d)(2)(ii) for payments to a (ATM) via payment card, or a cash advance or loan against
participating payee with only a foreign address without regard the cardholder's account.
to whether the amounts paid are described in Regulations • A check issued in connection with a payment card that is
section 1.1441-6(c)(2) or are reportable under Code section accepted by a merchant or other payee.
6042, 6045, 6049, or 6050N. • Any transaction in which a payment card is accepted as
payment by a merchant or other payee who is related to the
Alternative method for PSE that does not maintain
issuer of the payment card.
account for participating payee. The above exception to
reporting only applies if the PSE is a U.S. payer making a Conversion of amounts paid in foreign currency. When
payment to an account maintained outside the United States a payment is made or received in a foreign currency, the U.S.
by the PSE, or, if the PSE does not maintain an account for dollar amount must be determined by converting the foreign
the payee, to another financial institution maintaining the currency into U.S. dollars on the date of transaction at the
account outside the United States. To apply the exception, for spot rate (as defined in Regulations section 1.988-1(d)(1)) or
a PSE that does not maintain an account for the payee, the according to a reasonable spot rate convention, such as a
PSE must also reasonably determine that the participating month-end spot rate or a monthly average spot rate. The
payee is doing business outside the United States based on convention must be used consistently for all non-dollar
all the information obtained or reviewed in connection with amounts reported and from year to year. The convention
the establishment or maintenance of the contractual cannot be changed without the consent of the Commissioner
relationship with the participating payee (including or his or her delegate.
information required to be obtained or reviewed under Reporting under sections 6041, 6041A, and 6050W.
procedures required to be established under and compliant Payments made by payment card or through a third party
with 31 CFR section 1020.220). payment network after December 31, 2010, that otherwise
Exception for payments by U.S. payers to foreign would be reportable under sections 6041 (payments made in
payees prior to 2011. For payments under contractual the course of a trade or business to another person) or
obligations entered into before January 1, 2011, that are not 6041A(a) (payments of remuneration for services and certain

2 Instructions for Form 1099-K (Rev. 03-2024)

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direct sales) and 6050W are reported under section 6050W For more information about the requirement to furnish a
and not section 6041 or 6041A. For purposes of determining statement to each payee, see part M in the current General
whether payments are subject to reporting under section Instructions for Certain Information Returns.
6050W, rather than section 6041 or 6041A, the de minimis
threshold, discussed later under Box 1a, is disregarded. 2nd TIN Not. Box
You may enter an “X” in this box if you were notified by the
Who Must File IRS twice within 3 calendar years that the payee provided an
Every PSE or other party which submits instructions to incorrect TIN. If you mark this box, the IRS will not send you
transfer funds to the account of a participating payee, in any further notices about this account.
settlement of reportable payment transactions, must file an However, if you received both IRS notices in the same
information return (Form 1099-K) with respect to each year, or if you received them in different years but they both
participating payee for that calendar year. related to information returns filed for the same year, do not
Multiple PSEs. If two or more persons qualify as PSEs for check the box at this time. For purposes of the
the same reportable transaction, the PSE that submits the two-notices-in-3-years rule, you are considered to have
instruction to transfer funds must file the return. However, the received one notice and you are not required to send a
PSE obligated to file may designate another person to file the second “B” notice to the taxpayer on receipt of the second
return, including the PSE not making payment, if the parties notice. See part N in the current General Instructions for
agree in writing. If the designated person fails to timely file Certain Information Returns for more information.
the return, the entity with the responsibility to file is liable for
any applicable penalties under sections 6721 and 6722. For information on the TIN Matching System offered
Electronic payment facilitator (EPF). If a PSE contracts TIP by the IRS, see the current General Instructions for
with an EPF or other third party to make payments in Certain Information Returns.
settlement of reportable payment transactions on behalf of
the PSE, the facilitator or other third party must file Form FILER'S Name, Address, Telephone Number,
1099-K in lieu of the PSE. The facilitator is not required to and TIN Boxes
have any arrangement or agreement with the participating Enter the name, address (including street address, city or
payee. Payments need not come from the facilitator's town, state or province, country, and ZIP or foreign postal
account. The facilitator need only submit instructions to code), and telephone number of the entity with the filing
transfer funds to the account of the participating payee. The requirement (payer) in the box in the upper left corner. The
PSE can file Form 1099-K by designation if the parties agree telephone number must allow a payee to reach a person
in writing; however, the designation does not relieve the knowledgeable about the payments reported on the form.
facilitator from liability for any applicable penalties under Enter the TIN (EIN) of the entity with the filing requirement
sections 6721 and 6722 for failure to comply with the (payer) in the top box immediately to the right.
information reporting requirements.
See part O in the current General Instructions for Certain FILER Checkboxes
Information Returns for more information on penalties. Check the first (top) box in the section immediately below the
FILER'S name, street address, city or town, state or province,
Aggregated payees. If you receive payments from a PSE country, ZIP or foreign postal code, and telephone number
on behalf of one or more participating payees and you box if the entity with the filing requirement (payer) is a PSE.
distribute such payments to one or more participating Check the second (bottom) box if the entity with the filing
payees, you are: requirement (payer) is an EPF or other third party.
• The participating payee with respect to the PSE who sent
you the payment(s), and If the entity with the filing requirement (payer) is an EPF or
• The PSE with respect to the participating payees to whom other third party, enter the PSE's name and telephone
you distribute the payments. number in the box above the account number box at the
bottom left of the form. The telephone number must allow a
For more information on nominee/middleman reporting,
payee to reach a person knowledgeable about the payments
see part A in the current General Instructions for Certain
reported on the form.
Information Returns.
Transactions Reported Checkboxes
Statements to Payees
Check the first (top) box if you are reporting payment card
If you are required to file Form 1099-K, you must furnish a
transactions on this form. Check the second (bottom) box if
statement to the payee.
you are reporting third party network transactions on this
Truncating recipient’s TIN on payee statements. form.
Pursuant to Regulations section 301.6109-4, all filers of this If you are reporting payments to the same payee that
form may truncate a payee’s TIN (social security number include both payment card and third party network
(SSN), individual taxpayer identification number (ITIN), transactions, you must file a separate Form 1099-K reporting
adoption taxpayer identification number (ATIN), or employer the gross amount from each type.
identification number (EIN)) on payee statements. Truncation
is not allowed on any documents the filer files with the IRS. A Account Number
filer's TIN may not be truncated on any form. See part J in the
The account number is required if you have multiple accounts
current General Instructions for Certain Information Returns.
for a payee for whom you are filing more than one Form
Furnishing statements electronically. Statements may be 1099-K. Additionally, the IRS encourages you to designate an
furnished to payees electronically in lieu of a paper format. account number for all Forms 1099-K that you file. See part L
See Regulations section 1.6050W-2(a) for further in the current General Instructions for Certain Information
information. Returns.

Instructions for Form 1099-K (Rev. 03-2024) 3

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Box 1a. Gross Payment Card/Third Party • File separate Forms 1099-K reporting the gross receipts
Network Transactions for each MCC, or
• File a single Form 1099-K reporting total gross receipts
Enter in box 1a the gross amount of the total reportable and the MCC which corresponds to the largest portion of the
payment card/third party network transactions for the total gross receipts.
calendar year. Gross amount means the total dollar amount
of total reportable payment transactions for each participating Box 3. Number of Payment Transactions
payee without regard to any adjustments for credits, cash
Enter the number of payment transactions (not including
equivalents, discount amounts, fees, refunded amounts,
refund transactions) processed through the payment card/
shipping amounts, or any other amounts. The dollar amount
third party payer network.
of each transaction is determined on the date of the
transaction. Box 4. Federal Income Tax Withheld
Exception for de minimis payments. A TPSO is required Enter backup withholding. Persons who have not furnished
to report any information concerning third party network their TINs to you in the manner required are subject to
transactions of any participating payee only if the gross backup withholding on payments required to be aggregately
amount of total reportable payment transactions exceeds reported in box 1a.
$600 for the calendar year, regardless of the number of
transactions. A payment made by a TPSO is a reportable payment
potentially subject to section 3406 backup withholding.
For examples of reportable payment transactions,
including responsible filing parties, see Regulations section For more information on backup withholding, including the
1.6050W-1(e). applicable rate, see part N in the current General Instructions
for Certain Information Returns.
Box 1b. Card Not Present Transactions
Enter in box 1b the gross amount of the total reportable Boxes 5a Through 5l
payment card/third party network transactions for the Enter in the appropriate box the gross amount of the total
calendar year where the card was not present at the time of reportable payment transactions for each month of the
the transaction or the card number was keyed into the calendar year.
terminal. Typically, this relates to online sales, phone sales, or
catalogue sales. Gross amount means the total dollar amount Boxes 6 Through 8. State Information
of total reportable payment transactions for each participating These boxes may be used by filers who participate in the
payee without regard to any adjustments for credits, cash Combined Federal/State Filing Program and/or who are
equivalents, discount amounts, fees, refunded amounts, required to file paper copies of this form with a state tax
shipping amounts, or any other amounts. The dollar amount department. See Pub. 1220 for more information regarding
of each transaction is determined on the date of the the Combined Federal/State Filing Program. They are
transaction. provided for your convenience only and need not be
completed for the IRS. Use the state information boxes to
Box 2. Merchant Category Code report payments for up to two states. Keep the information for
Enter the four-digit merchant category code (MCC) used by each state separated by the dash line. If you withheld state
the payment card industry to classify the payee for the income tax on this payment, you may enter it in box 8. In
payment card transactions reported on this Form 1099-K. If box 6, enter the abbreviated name of the state. In box 7, enter
you or the entity on whose behalf you are filing uses an the filer's state identification number. The state number is the
industry classification system other than, or in addition to, filer's identification number assigned by the individual state.
MCCs, assign to each payee an MCC that most closely
corresponds to the description of the payee's business. If a state tax department requires that you send them a
paper copy of this form, use Copy 1 to provide information to
Note. If you or the entity on whose behalf you are filing is a the state tax department. Give Copy 2 to the payee for use in
TPSO or does not use any industry classification system for filing the payee's state income tax return.
its payees, you should not complete this box.
If a payee has receipts classified under more than one
MCC, you may either:

4 Instructions for Form 1099-K (Rev. 03-2024)

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