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Department of the Treasury
Internal Revenue Service
Instructions for

Form 1099-K

(Rev. January 2022)
Payment Card and Third Party Network Transactions

Section references are to the Internal Revenue Code unless the PSE submits the instruction to transfer funds to the
otherwise noted. account of the participating payee to settle the reportable
payment transaction.
What’s New
A PSE is a domestic or foreign entity that is a merchant
Exceptions for reporting of third party network transac- acquiring entity, that is, a bank or other organization that has
tions. The reporting requirement for these transactions has the contractual obligation to make payment to participating
changed from totals exceeding $20,000 to exceeding $600, payees in settlement of payment card transactions; or a third
regardless of the total number of transactions. See Exception party settlement organization (TPSO), that is, the central
for de minimis payments, later, for more information. organization that has the contractual obligation to make
payments to participating payees of third party network
Continuous-use form and instructions. Form 1099-K and
transactions.
these instructions have been converted from an annual
revision to continuous use. Both the form and instructions will Note. Healthcare networks, in-house accounts payable
be updated as needed. For the most recent version, go to departments, and automated clearing houses do not qualify
IRS.gov/Form1099K. as TPSOs and do not report under section 6050W.
Future Developments A participating payee is any person, including any
For the latest information about developments related to governmental unit (and any agency or instrumentality of a
Form 1099-K and its instructions, such as legislation enacted governmental unit) who accepts a payment card, or any
after they were published, go to IRS.gov/Form1099K. account number or other indicia associated with a payment
card, as payment or accepts payment from a TPSO in
Reminders settlement of a third party network transaction.
In addition to these specific instructions, you should also use A payment card is any card, including any stored-value
the current General Instructions for Certain Information card (having prepaid value, including gift cards), issued
Returns. Those general instructions include information according to an agreement or arrangement that provides for
about the following topics. all of the following.
• Who must file. • One or more issuers of the cards.
• When and where to file. • A network of persons unrelated to each other, and to the
• Electronic reporting. issuer, who agree to accept the cards as payment.
• Corrected and void returns. • Standards and mechanisms for settling the transactions
• Statements to recipients. between the merchant acquiring entities and the persons
• Taxpayer identification numbers (TINs). who agree to accept the cards as payment.
• Backup withholding.
• Penalties. A third party payment network is any agreement or
• Other general topics. arrangement that provides for the following.
• The establishment of accounts with a central organization
You can get the General Instructions for Certain by a substantial number of providers of goods or services
Information Returns at IRS.gov/1099GeneralInstructions or who are unrelated to the organization and who have agreed
go to IRS.gov/Form1099K. to settle transactions for the provision of the goods or
Online fillable Copies 1, B, 2, and C. To ease statement services to purchasers according to the terms of the
furnishing requirements, Copies 1, B, 2, and C of Form agreement or arrangement.
1099-K are fillable online in a PDF format, available at • Standards and mechanisms for settling the transactions.
IRS.gov/Form1099K. You can complete these copies online • Guarantee of payment to the persons providing goods or
for furnishing statements to recipients and for retaining in services (participating payees) in settlement of transactions
your own files. with purchasers pursuant to the agreement or arrangement.
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, Exception for payments made outside the United
Payment Card and Third Party Network Transactions, for States by U.S. payers or middlemen to offshore
payments made in settlement of reportable payment accounts after 2010. For payments under contractual
transactions for each calendar year. A PSE makes a obligations entered into after December 31, 2010, a PSE that
payment in settlement of a reportable payment transaction, is a person as described in Regulations section 1.6049-5(c)
that is, any payment card or third party network transaction, if (5) as a U.S. payer or U.S. middleman is not required to file

Dec 02, 2021 Cat. No. 54721E

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Form 1099-K for payments to a participating payee with a contractual relationship with the participating payee
foreign address as long as, prior to payment, the PSE has (including information required to be obtained or reviewed
documentation on which the PSE may rely to treat the under procedures required to be established under and
payment as made to a foreign person according to compliant with 31 CFR section 1020.220). However, a PSE
Regulations section 1.1441-1(e)(1)(ii) (substituting “payer” for must file Form 1099-K for payments made to an offshore
the term “withholding agent” and without regard to the account if any of the following apply.
limitations to amounts subject to withholding requirements of • There is a U.S. residential or correspondence address
chapter 3 of the Code and its regulations). associated with the participating payee.
A PSE must file Form 1099-K for payments made outside • The PSE has standing instructions to direct the payment to
the United States to an offshore account if any of the a bank account maintained in the United States.
following apply. • The PSE knows or has reason to know that the
• There is a U.S. residential or correspondence address participating payee is a U.S. person.
associated with the participating payee. A PSE that obtains a valid Form W-8 or documentary
• The PSE has standing instructions to direct the payment to evidence establishing the payee's non-U.S. status and does
a bank account maintained in the United States. not know the payee is a U.S. person is not required to file
• The PSE knows or has reason to know that the Form 1099-K even if any of the circumstances described in
participating payee is a U.S. person. the preceding paragraph are present. For more information
A PSE is not required to file Form 1099-K for payments on this exception, see Notice 2012-2.
made outside the United States to an offshore account in the Exception for payments by U.S. payers to foreign
circumstances described in the preceding paragraph if the payees prior to 2011. For payments under contractual
PSE does not know that the payee is a U.S. person and the obligations entered into before January 1, 2011, a PSE that is
PSE obtains from the payee a Form W-8BEN, Certificate of a U.S. payer or U.S. middleman is not required to file a Form
Foreign Status of Beneficial Owner for United States Tax 1099-K for a payment to a participating payee with a foreign
Withholding and Reporting (Individuals); or Form W-8ECI, address as long as the payer does not know or have reason
Certificate of Foreign Person’s Claim That Income Is to know that the participating payee is a U.S. person.
Effectively Connected With the Conduct of a Trade or A foreign address means any address that is not within the
Business in the United States; or documentary evidence United States (the States and the District of Columbia).
establishing the payee’s non-U.S. status; or a suitable Exception for payments made by non-U.S. payers or
substitute form as described in Notice 2011-71, available at middlemen to foreign payees. A PSE that is not described
IRS.gov/irb/2011-37_IRB#NOT-2011-71. The W-8 forms (or as a U.S. payer or U.S. middleman in Regulations section
the suitable substitutes) must be collected by the PSE no 1.6049-5(c)(5) is not required to file a Form 1099-K for
later than 90 days after the date on which the PSE enters into payment to a participating payee that does not have a U.S.
the contractual obligations with the participating payee. The address as long as the PSE does not know or have reason to
W-8 forms (or suitable substitutes) and documentary know that the participating payee is a U.S. person. If the
evidence may be relied upon only when the requirements participating payee has any U.S. address, the PSE may treat
described in Notice 2011-71 are satisfied. the participating payee as a foreign person only if the PSE
A PSE does not have to file Form 1099-K for payments has documentation on which the PSE may rely to treat the
made outside the United States (within the meaning of payment as made to a foreign person according to
Regulations section 1.6049-5(e)) to an offshore account (as Regulations section 1.1441-1(e)(1)(ii).
described in Notice 2012-2, available at IRS.gov/irb/ A PSE that is a non-U.S. payer that has reason to know
2012-45_IRB#NOT-2012-2) of a participating payee with but not actual knowledge that a participating payee is a U.S.
only a foreign address if the name of the participating payee person will not be required to file Form 1099-K if the PSE
indicates that it is a per se corporation under Regulations obtains from the payee a Form W-8 or documentary
section 301.7701-2(b)(8)(i) and the PSE does not know or evidence that satisfies the requirements described in Notice
have reason to know that the participating payee is a U.S. 2011-71.
person.
A PSE may accept a substitute form, as described in
A PSE may apply the grace period rules under Notice 2011-71, in lieu of Form W-8BEN so that a
Regulations section 1.6049-5(d)(2)(ii) for payments to a participating payee can certify its non-U.S. status.
participating payee with only a foreign address without Documentary evidence, described in Notice 2011-71,
regard to whether the amounts paid are described in submitted to establish the identity of the payee and the status
Regulations section 1.1441-6(c)(2) or are reportable under of that person as a foreign person remains valid until the
Code section 6042, 6045, 6049, or 6050N. earlier of the last day of the third calendar year following the
Exception for payments made by U.S. payers or year in which the documentary evidence is provided to the
middlemen to accounts maintained outside the United withholding agent or the day that a change in circumstances
States after 2010. A PSE is also not required to file Form occurs that makes any information on the documentary
1099-K in certain circumstances for payments made to an evidence incorrect.
account maintained outside the United States. This A U.S. address is any address that is within the United
exception only applies if the PSE is a U.S. payer making a States (the States and the District of Columbia).
payment to an account maintained outside the United States
by the PSE, or, if the PSE does not maintain an account for Nonreportable transactions. The following transactions
the payee, to another financial institution maintaining the are nonreportable under section 6050W.
account outside the United States. To apply this exception, • A withdrawal of funds at an automated teller machine
the PSE must also reasonably determine that the (ATM) via payment card, or a cash advance or loan against
participating payee is doing business outside the United the cardholder's account.
States based on all the information obtained or reviewed in • A check issued in connection with a payment card that is
connection with the establishment or maintenance of the accepted by a merchant or other payee.

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• Any transaction in which a payment card is accepted as For more information on nominee/middleman reporting,
payment by a merchant or other payee who is related to the see part A in the current General Instructions for Certain
issuer of the payment card. Information Returns.

Conversion of amounts paid in foreign currency. When Statements to Payees
a payment is made or received in a foreign currency, the U.S.
dollar amount must be determined by converting the foreign If you are required to file Form 1099-K, you must furnish a
currency into U.S. dollars on the date of transaction at the statement to the payee.
spot rate (as defined in Regulations section 1.988-1(d)(1)) or Truncating recipient’s TIN on payee statements.
according to a reasonable spot rate convention, such as a Pursuant to Regulations section 301.6109-4, all filers of this
month-end spot rate or a monthly average spot rate. The form may truncate a payee’s TIN (social security number
convention must be used consistently for all non-dollar (SSN), individual taxpayer identification number (ITIN),
amounts reported and from year to year. The convention adoption taxpayer identification number (ATIN), or employer
cannot be changed without the consent of the Commissioner identification number (EIN)) on payee statements. Truncation
or his or her delegate. is not allowed on any documents the filer files with the IRS. A
Reporting under sections 6041, 6041A, and 6050W. filer's TIN may not be truncated on any form. See part J in the
Payments made by payment card or through a third party current General Instructions for Certain Information Returns.
payment network after December 31, 2010, that otherwise Furnishing statements electronically. Statements may be
would be reportable under sections 6041 (payments made in furnished to payees electronically in lieu of a paper format.
the course of a trade or business to another person) or See Regulations section 1.6050W-2(a) for further
6041A(a) (payments of remuneration for services and certain information.
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.
Who Must File You may enter an “X” in this box if you were notified by the
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
information return (Form 1099-K) with respect to each However, if you received both IRS notices in the same
participating payee for that calendar year. year, or if you received them in different years but they both
Multiple PSEs. If two or more persons qualify as PSEs for related to information returns filed for the same year, do not
the same reportable transaction, the PSE that submits the check the box at this time. For purposes of the
instruction to transfer funds must file the return. However, the two-notices-in-3-years rule, you are considered to have
PSE obligated to file may designate another person to file the received one notice and you are not required to send a
return, including the PSE not making payment, if the parties second “B” notice to the taxpayer on receipt of the second
agree in writing. If the designated person fails to timely file notice. See part N in the current General Instructions for
the return, the entity with the responsibility to file is liable for Certain Information Returns for more information.
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
1099-K in lieu of the PSE. The facilitator is not required to FILER'S Name, Address, Telephone Number,
have any arrangement or agreement with the participating and TIN Boxes
payee. Payments need not come from the facilitator's Enter the name, address (including street address, city or
account. The facilitator need only submit instructions to town, state or province, country, and ZIP or foreign postal
transfer funds to the account of the participating payee. The code), and telephone number of the entity with the filing
PSE can file Form 1099-K by designation if the parties agree requirement (payer) in the box in the upper left corner. The
in writing; however, the designation does not relieve the telephone number must allow a payee to reach a person
facilitator from liability for any applicable penalties under knowledgeable about the payments reported on the form.
sections 6721 and 6722 for failure to comply with the Enter the TIN (EIN) of the entity with the filing requirement
information reporting requirements. (payer) in the top box immediately to the right.
See part O in the current General Instructions for Certain
Information Returns for more information on penalties. FILER Checkboxes
Check the first (top) box in the section immediately below the
Aggregated payees. If you receive payments from a PSE FILER'S name, street address, city or town, state or province,
on behalf of one or more participating payees and you country, ZIP or foreign postal code, and telephone number
distribute such payments to one or more participating box if the entity with the filing requirement (payer) is a PSE.
payees, you are: Check the second (bottom) box if the entity with the filing
• The participating payee with respect to the PSE who sent requirement (payer) is an EPF or other third party.
you the payment(s), and
• The PSE with respect to the participating payees to whom If the entity with the filing requirement (payer) is an EPF or
you distribute the payments. other third party, enter the PSE's name and telephone
number in the box above the account number box at the

Instructions for Form 1099-K (Rev. 01-2022) -3-

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bottom left of the form. The telephone number must allow a payment card transactions reported on this Form 1099-K. If
payee to reach a person knowledgeable about the payments you or the entity on whose behalf you are filing uses an
reported on the form. industry classification system other than, or in addition to,
MCCs, assign to each payee an MCC that most closely
Transactions Reported Checkboxes corresponds to the description of the payee's business.
Check the first (top) box if you are reporting payment card
transactions on this form. Check the second (bottom) box if Note. If you or the entity on whose behalf you are filing is a
you are reporting third party network transactions on this TPSO or does not use any industry classification system for
form. its payees, you should not complete this box.
If you are reporting payments to the same payee that If a payee has receipts classified under more than one
include both payment card and third party network MCC, you may either:
transactions, you must file a separate Form 1099-K reporting • File separate Forms 1099-K reporting the gross receipts
the gross amount from each type. for each MCC, or
• File a single Form 1099-K reporting total gross receipts
Account Number and the MCC which corresponds to the largest portion of the
The account number is required if you have multiple total gross receipts.
accounts for a payee for whom you are filing more than one
Form 1099-K. Additionally, the IRS encourages you to Box 3. Number of Payment Transactions
designate an account number for all Forms 1099-K that you Enter the number of payment transactions (not including
file. See part L in the current General Instructions for Certain refund transactions) processed through the payment card/
Information Returns. third party payer network.

Box 1a. Gross Payment Card/Third Party Box 4. Federal Income Tax Withheld
Network Transactions Enter backup withholding. Persons who have not furnished
Enter in box 1a the gross amount of the total reportable their TINs to you in the manner required are subject to
payment card/third party network transactions for the backup withholding on payments required to be aggregately
calendar year. Gross amount means the total dollar amount reported in box 1a.
of total reportable payment transactions for each participating
A payment made by a TPSO is a reportable payment
payee without regard to any adjustments for credits, cash
potentially subject to section 3406 backup withholding.
equivalents, discount amounts, fees, refunded amounts, or
any other amounts. The dollar amount of each transaction is For more information on backup withholding, including the
determined on the date of the transaction. applicable rate, see part N in the current General Instructions
Exception for de minimis payments. A TPSO is required for Certain Information Returns.
to report any information concerning third party network
transactions of any participating payee only if the gross Boxes 5a Through 5l
amount of total reportable payment transactions exceeds Enter in the appropriate box the gross amount of the total
$600 for the calendar year, regardless of the number of reportable payment transactions for each month of the
transactions. calendar year.

For examples of reportable payment transactions, Boxes 6 Through 8. State Information
including responsible filing parties, see Regulations section
1.6050W-1(e). These boxes may be used by filers who participate in the
Combined Federal/State Filing Program and/or who are
Box 1b. Card Not Present Transactions required to file paper copies of this form with a state tax
department. See Pub. 1220 for more information regarding
Enter in box 1b the gross amount of the total reportable
the Combined Federal/State Filing Program. They are
payment card/third party network transactions for the
provided for your convenience only and need not be
calendar year where the card was not present at the time of
completed for the IRS. Use the state information boxes to
the transaction or the card number was keyed into the
report payments for up to two states. Keep the information for
terminal. Typically, this relates to online sales, phone sales,
each state separated by the dash line. If you withheld state
or catalogue sales. Gross amount means the total dollar
income tax on this payment, you may enter it in box 8. In
amount of total reportable payment transactions for each
box 6, enter the abbreviated name of the state. In box 7,
participating payee without regard to any adjustments for
enter the filer's state identification number. The state number
credits, cash equivalents, discount amounts, fees, refunded
is the filer's identification number assigned by the individual
amounts, or any other amounts. The dollar amount of each
state.
transaction is determined on the date of the transaction.
If a state tax department requires that you send them a
Box 2. Merchant Category Code paper copy of this form, use Copy 1 to provide information to
Enter the four-digit merchant category code (MCC) used by the state tax department. Give Copy 2 to the payee for use in
the payment card industry to classify the payee for the filing the payee's state income tax return.

-4- Instructions for Form 1099-K (Rev. 01-2022)

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