IRS Form 1099-K for 2026: A Complete Guide

What is Form 1099-K?

Form 1099-K, Payment Card and Third Party Network Transactions, is an IRS information return that payment settlement entities file to report the gross amount of payments they settled for a payee during the calendar year. It is required under Internal Revenue Code section 6050W.

If you settle payments for merchants, sellers, or service providers, you are responsible for filing Form 1099-K with the IRS and furnishing a copy to each payee.

Form 1099-K covers two types of transactions:

• Payment card transactions: credit, debit, and stored-value cards, including prepaid and gift cards
• Third-party network transactions: payments settled through online marketplaces, payment apps, and other third-party settlement organizations

Some transactions are not reportable on Form 1099-K, including ATM withdrawals, cash advances or loans against a cardholder account, checks issued in connection with a payment card, and card payments accepted by a merchant related to the card issuer.

Who must file Form 1099-K?

A payment settlement entity (PSE) must file Form 1099-K for each participating payee it settles reportable payment transactions for during the calendar year. There are two types of PSEs:

• Merchant acquiring entities: Banks or other organizations contractually obligated to pay merchants for payment card transactions.
• Third-party settlement organizations (TPSOs): The central organization that pays providers of goods or services through a third-party payment network, such as an online marketplace or payment app.

The filing obligation can also shift to other parties:

• Electronic payment facilitators (EPFs): If a PSE contracts with an EPF or other third party to make payments on its behalf, the EPF files Form 1099-K instead of the PSE.
• Multiple PSEs: When more than one entity qualifies as the PSE for the same transaction, the one that submits the instruction to transfer funds files the return. Another party can file by written agreement, but the original PSE stays liable for penalties if that party fails to file.
• Aggregated payees: if you receive payments from a PSE and distribute them to other payees, you are the payee to that PSE and the PSE to the payees you distribute to.

Not every payment platform qualifies as a TPSO. Healthcare networks, in-house accounts payable departments, and automated clearing houses do not report under section 6050W.

What is the Form 1099-K reporting threshold for 2026?

The threshold depends on the transaction type.

The One Big Beautiful Bill Act (OBBBA) restored this $20,000 and 200-transaction threshold. It replaced the lower thresholds that had been scheduled under the American Rescue Plan Act.

Backup withholding.

A payment made by a TPSO can be subject to backup withholding if the payee hasn't furnished a correct TIN. If you withheld, report it in Box 4. Backup withholding can apply even to a payee below the $20,000/200-transaction threshold, so a payee who hasn't met the threshold can still require a Form 1099-K once withholding applies.

State thresholds can be lower.

Several states require Form 1099-K reporting at thresholds well below the federal rule. Confirm state-specific filing obligations separately from the federal threshold.

What’s new on Form 1099-K for the 2026 tax year?

The IRS released the December 2026 revision of Form 1099-K and its instructions with two new boxes for tip reporting, a restored TPSO threshold, and separated address fields.

• Box 1 now has four parts

  Box	What it reports
  1a	Gross amount of payment card or third-party network transactions, same as before
  1b	Card Not Present transactions, same as before
  1c	Cash tips, new for 2026. Cash tips include tips received in cash or charged, and the amount is also included in Box 1a
  1d	Treasury Tipped Occupation Code (TTOC), new for 2026. Up to two codes for the payee’s tipped occupation(s)

• Why the new tip boxes matter

  OBBBA (P.L. 119-21, section 70201) requires cash tip reporting. Payees use the Box 1c amount and Box 1d codes to figure the deduction for qualified tips on Schedule 1-A (Form 1040).

• Box 1c is a breakout, not an addition

  The tips in Box 1c are already part of the Box 1a gross amount. Don’t add them on top.

• Box 1d has a "000" rule

  If any tips were received in a nonqualifying occupation, enter 000 as one of the codes. If tips were received in more than two occupations, enter codes for any two of them. The code list is at IRS.gov/TippedOccupations.

• Restored TPSO threshold

  Third-party network transactions are reportable only above $20,000 and 200 transactions.

• Address fields are broken out

  Filer and payee address blocks are now separated into individual entry fields, rather than a single free-text line.

The FIRE e-file system retires December 31, 2026, and IRIS becomes the required filing system afterward. See how TaxBandits helps with IRIS transition

What are the copies of Form 1099-K?

What information is required to complete Form 1099-K?

• Filer’s name, TIN, address, and a phone number that reaches someone who knows about the payments
• Filer type: PSE, or EPF/other third party (if EPF, also the PSE’s name and phone number)
• Transaction type: payment card or third party network
• Payee’s name, TIN, and address
• Account number, required if you file more than one Form 1099-K for the same payee
• Gross amount of transactions (Box 1a) and Card Not Present transactions (Box 1b)
• Cash tips (Box 1c) and TTOC (Box 1d), if applicable
• Merchant category code (Box 2), not used by TPSOs
• Number of payment transactions, excluding refunds (Box 3)
• Federal income tax withheld (Box 4)
• Monthly gross amounts for January through December (Boxes 5a to 5l)
• State information, including state tax withheld (Boxes 6 to 8)

If a payee received both payment card and third-party network transactions, file a separate Form 1099-K for each type. Learn more about box-by-box entries in our Form 1099-K Instructions guide.

When is the deadline for Form 1099-K?

For the 2026 tax year (filed in 2027):

See our Form 1099-K Due Date guide for state-specific deadlines.

Can I get an extension for Form 1099-K?

Yes. Unlike Form 1099-NEC and Form W-2, Form 1099-K qualifies for an automatic 30-day extension.

File Form 8809 electronically or by paper on or before the original due date to receive it. A separate request, Form 15397, can be filed if you need more time to furnish payee copies.

Are there penalties for late filing of Form 1099-K?

Annual maximum caps also apply and differ for small businesses (average annual gross receipts of $5 million or less) versus larger filers. If a designated filer fails to file, the PSE or EPF that holds the obligation is still liable. See our 1099-K Penalty guide for a detailed breakdown.

Form 1099-K vs. Form 1099-NEC vs. Form 1099-MISC

The deciding factor is how the payment was made, not what it was for. A business that pays a contractor through a card or payment app does not issue Form 1099-NEC for that payment. The payment settlement entity reports it on Form 1099-K instead.

Common Form 1099-K filing mistakes to avoid

• Reporting net instead of gross. Box 1a must show the gross amount before fees, refunds, shipping, or discounts.
• Applying the TPSO threshold to card transactions. The $20,000 and 200-transaction threshold applies only to third-party network transactions. Payment card transactions are reportable in any amount.
• Checking only one threshold condition. For TPSOs, payments must exceed both $20,000 and 200 transactions.
• Adding tips on top of the gross amount. Box 1c cash tips are already included in Box 1a.
• Missing the 000 code. If any tips came from a nonqualifying occupation, Box 1d must include 000.
• Combining transaction types on one form. Payment card and third-party network transactions for the same payee go on separate forms.
• Monthly totals that don’t match Box 1a. Boxes 5a to 5l should add up to the annual gross amount.
• Leaving address fields unmapped for 2026. With address blocks now split into individual fields, a data import built for the old single-line format may fail validation.

How to file Form 1099-K for the 2026 tax year

You can file Form 1099-K electronically or on paper, though the IRS strongly recommends e-filing. If you file 10 or more information returns in total, you are required to e-file.

To e-file with TaxBandits:

• Step 1: Create a free account.
• Step 2: Select or add the business you're filing for.
• Step 3: Enter the required Form 1099-K details, including the new Box 1c and 1d fields and monthly amounts.
• Step 4: Review and transmit your return to the IRS and applicable states.

E-File Form 1099-K Now, starting as low as $0.80/form.

Frequently asked questions

If your payee has questions about their 1099-K

Payees often contact the filer once their copy arrives, especially small sellers and gig workers receiving a 1099-K for the first time. Clear answers reduce correction requests during filing season.