Posted: October 29, 2026
Many business owners will begin preparing their records for tax time in January. If you take payments by credit card, sell items on online marketplaces, or receive payments through certain digital payment platforms, you may receive a Form 1099-K for payments you received in 2026.
The 1099-K will show certain payments that have been made using credit cards and third-party digital payment platforms. This can help you confirm your sales records and prepare for tax time. However, it may not match what was paid into your bank account.
This can get complicated, but if you have a lot of payments going through your business, you may see differences in the amount deposited into your bank account because of processing fees, refunds, and other adjustments. However, a Form 1099-K typically shows how much you were paid in total.
Understanding the 2026 1099-K reporting rules will help you prepare for tax time. This guide explains what the form shows, the reporting limits, and how to match the amounts to your business records.
A Form 1099-K is a tax form that shows details of payments a business or individual receives for services or goods sold. You may receive this form from payment card processors, online marketplaces or digital payment platforms.
If your customers are paying using credit/debit cards, then the payments will be reported to you by your payment processor using a Form 1099-K.
This will show your gross payments. There are no automatic calculations for processing fees, refunds, discounts, and/or cost of goods.
For example, if your store has processed $100,000 in card payments during the year. If you pay processing fees and issue $5,000 in refunds, you could have under $100,000 in bank deposits, but your 1099-K will show the original payment amounts.
This does not necessarily reflect the total amount of taxable income you have earned. It can be used to calculate your business income, expenses and adjustments by comparing it to your other documents.
Form 1099-K can be used with your sales reports, payment processor statements, receipts and banking documents. For more information about the form, the Internal Revenue Service (IRS) has an Understanding Your Form 1099-K guide.
The 1099-K threshold will depend on how your business receives payments in 2026. Different federal reporting requirements apply to businesses that take payments directly onto a payment card and to businesses where settlement is processed through a third-party organization, such as some payment apps and online selling platforms.
No minimum threshold applies to transactions made using payment cards. If you take qualifying payments via credit, debit or gift cards, then the payment settlement entity should report these transactions to you using a Form 1099-K, regardless of the value of the payments.
For third-party settlement organizations, the federal reporting limit differs. For the 2026 tax year, payments will generally need to be reported if both of the following apply:
Third-party settlement organizations must report under federal requirements if both criteria apply.
For example, if you have received $22,000 through a qualifying payment app across 220 transactions. If your payments exceed $20,000 and you have more than 200 exchanges, you will generally meet the federal reporting limit.
Let’s say you earned $22,000 across 180 transactions. The amount is above $20,000, but you didn’t process more than 200 transactions. In this case, you wouldn’t meet the federal requirements for a third-party settlement organization to issue a Form 1099-K.
However, you may get a Form 1099-K. This is because the payment provider may decide to send you the form, and certain states have lower requirements. The rules also depend on whether your payments went directly through a card network or a third-party payment interface.
Most importantly, whether you have to declare the income doesn’t rely on the requirements. If you received income from selling products/services, you may still need to declare it even if you didn’t receive a 1099-K.
Do not use the threshold as a reason to leave sales out of your records. Keep track of all business income, regardless of how customers pay you or whether a payment provider sends a tax form.
The organization that processes reportable payments usually provides the details on a Form 1099-K. This could be a payment processor, payment card company, payment app or online marketplace depending on how you receive payments.
A physical retail store that takes card payments may receive a Form 1099-K from its payment processor. If it also sells through an online marketplace, it may receive another one.
Receiving multiple forms is not necessarily an issue. You will usually receive forms from different organizations. Just make sure you know where your money is recorded and don’t double-count any income.
You can generally expect to receive forms for the 2026 tax year by the end of January 2027. The typical deadline is January 31; however, in 2027, it falls on a Sunday, so providers have until the next business day. Please check IRS guidelines and any notices from your provider.
Some providers will allow you to view your Form 1099-K online via your account. Others may send the form electronically or by mail. Check your payment account and emails throughout January, particularly if you are using multiple services to receive payments.
Check that the information on the form (including the name, tax details and gross payment) is correct for your business. Check that they relate to the right tax year. If you see any information you don’t recognize, find out why.
A common question from business owners is why the amount on Form 1099-K doesn’t match the amount in their bank account.
This is generally because Form 1099-K shows the total amount you received (before any deductions). The amount can be reduced before it goes into your bank account.
For example, if your business received $150,000 in card payments during 2026. During the year, you issue refunds, pay processing fees, and adjust certain transactions. If your bank deposits total less than $150,000, you will still receive the gross amount on Form 1099-K.
This is best understood by reviewing your processor statements, POS reports, sales reports, refund reports, and bank deposits.
Be aware of the period you are looking at. If a payment is made toward the end of December, it might not come into your bank account until January. This can create discrepancies when you compare your end-of-year bank deposits with your annual payment reports.
Review multiple payment processors. For example, you may have a card processor that reports payments processed via your in-store terminal on its form. You may also have an online marketplace.
Your Form 1099-K total doesn’t need to match the amount you deposited into your bank account exactly, but you must be able to explain any discrepancy using your records. The Internal Revenue Service (IRS) has more guidance.
If the number shown on your Form 1099-K seems incorrect, check your records to see if you have any refunds, service charges, double reporting, someone else processed the transaction, or it was made near the end of the year.
Make sure that you are comparing the correct numbers. For example, the sales report may show net sales (after refunds), while Form 1099-K may show gross transaction amounts. This could create a discrepancy, but it isn’t necessarily an error.
If the amount is still incorrect, contact the organization that sent you the form and explain what does not match. Provide any statements or transaction reports showing why they don’t match. The entity should then provide you with the correct Form 1099-K if they agree that there are errors on the form.
Check whether the form includes payments made to another individual/business. If you receive the form but did not make the transactions included, contact the entity that sent you the form and refer to the guidance provided by the IRS.
Keep a copy of the original form plus any documents and correspondence you have with your provider. If you receive a corrected version, keep a copy of that as well.
Don’t just leave it. If you’re running out of time to file your taxes, then contact a qualified tax professional to find out what to do. They can help you report your income correctly.
The easiest way to prepare for tax time is to keep track of your payments throughout the year. This helps you avoid issues when you’re trying to find gaps or explain discrepancies after going through months’ worth of statements in January.
Keep records of your monthly payment processor statements, sales reports, refunds, chargebacks, and bank statements. If you use multiple providers to take payments, ensure they are clearly labeled so you know what each one relates to.
Track your processing fees, refunds, and cancellations. This will help you quickly understand why your total on a Form 1099-K differs from the amount you received in your bank account.
At the end of each month, check that your payment reports match your sales and the money in your bank account. If there are discrepancies, investigate them while they’re still easy to find.
Form 1099-K reports payments made by card, through digital payment platforms, and via online marketplaces. Federal reporting rules for third-party settlement organizations were restored to the $20,000 and 200-transaction threshold by legislation in 2025; payment card transactions have no minimum.
Check the form you receive in January 2027 against your processing statements, sales, refunds, and bank deposits to ensure everything adds up. If you find discrepancies, find out why and contact the issuer (if you believe the form is incorrect).
Keeping accurate payment records throughout the year can make tax preparation easier and help you resolve reporting issues before filing your return.
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In general, third-party settlement organizations must report to the federal government if they process over $20,000 in gross payment volume and more than 200 transactions. There is no minimum reporting requirement for transactions made using payment cards.
Form 1099-K shows total payments made before deducting processing fees, refunds, and certain adjustments. As such, it may be higher than your net income.
You may get a separate Form 1099-K from each payment processor or platform that reports your transactions.
