Who sends you a 1099-K
Two kinds of companies send a 1099-K: payment card processors (credit, debit, and stored-value cards) and third-party settlement organizations (TPSOs), which are payment apps and online marketplaces like Venmo, PayPal, Etsy, and rideshare platforms. Card processors report any amount, no matter how small.
For 2025 and 2026, TPSOs only have to send you a form if your payments for goods or services topped $20,000 and you had more than 200 transactions in the year.
What counts as reportable income and what doesn’t
Form 1099-K is meant for payments you got for goods or services, including:
- Side-hustle income
- Gig work
- Online sales
Even though they move through the same app, the following are examples of income that’s not reportable:
- Money you receive as a gift
- Repayment for a shared meal or car ride
- Reimbursement from a roommate for a household bill
If the app lets you identify personal payments, doing so can help keep personal and business transactions separate. Keep your own records in case a payment is reported incorrectly.
If you sold personal items: gain vs. loss
| Situation | What it means | Where it goes |
|---|---|---|
| Sold at a loss | You paid more for the item than you sold it for | No taxable income; offsetting entries on Schedule 1 |
| Sold at a gain | You sold the item for more than you paid | Taxable; reported on Form 8949 and Schedule D |
Source: Internal Revenue Service
1099-K vs. 1099-NEC: the key differences
A 1099-K comes from the payment platform and reports gross payments processed on your behalf. A 1099-NEC comes from whoever paid you directly for services and reports what they paid, unrelated to how you got paid. You can receive both for the same income—one doesn’t cancel out the other, so keep records showing how the two overlap.
What to do if your 1099-K is wrong
- Contact the issuer listed in the upper-left corner of the form right away.
- Ask for a corrected 1099-K showing the right amount, or a zero if it shouldn’t have been issued at all.
- If you can’t get a corrected form before filing, use your records to report the income correctly and follow the IRS’s instructions for explaining an incorrect Form 1099-K.
