FAQ's About 1099-K

What is Form 1099-K?

Also known as the Payment Card and Third Party Network Transactions form, the 1099-K is used to report transactions that are made via payment settlement entities. Meaning, if you use a service to process credit or debit card transactions, that service is a payment settlement entity, and the amount of those types of transactions for the year should be reported on the Form 1099-K.

The 1099-K form is pre-populated with the monthly and annual gross sales volume related to payment cards and is sent to the merchant on behalf of iClassPro.

When will I receive my 1099-K?

You should receive Form 1099-K by January 31st if, in the prior calendar year, you received payments:

  • from payment card transactions (e.g., debit, credit or stored-value cards), and/or
  • in settlement of third-party payment network transactions above the minimum reporting thresholds of –
    • gross payments that exceed $20,000, AND
    • more than 200 such transactions

How are the reported sales on the 1099-K form calculated? 

The 1099-K form will list the gross dollar amount of payment card transactions for the tax year. Gross dollar amount means that the dollar amounts listed on the 1099-K form are sales only. Refunds and adjustments and reversals are not counted / included.

This also means that the dollar volume totals listed on your month end paper statements may not match what is listed on the 1099-K form; the merchant's month end statement shows net dollar amounts, which means sales volume minus refunds and adjustments and reversals.

When is my 1099-K due?

Information reporting for payment card and third party network transactions is due to the IRS on the last day of February of the year following the transactions. If filing electronically, it is due the first day of April of the year following the transactions.

For more information and instructions on filling out your 1099-K visit

Please feel free to contact our payments team at Payments@iClassPro.com if you have additional questions about the 1099-K. 

 

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