What is a 1099-K and who receives one?

A Form 1099-K is issued by payment settlement entities — companies that facilitate payment card transactions or third-party network transactions — and reports the gross payments processed through their platform on behalf of a payee. Examples include Stripe (used by Substack and many e-commerce platforms), PayPal, Square, Venmo for Business, and Shopify Payments. Banks and traditional payment processors also issue 1099-Ks in their capacity as merchant acquirers for card transactions.

For tax year 2026, the threshold for 1099-K issuance is $600 in gross payments through the platform during the calendar year, regardless of the number of transactions. The IRS lowered this threshold from the prior $20,000 / 200 transaction threshold that was in place for several years. Creators and sellers who receive $600 or more through any single processor should expect a 1099-K from that processor by January 31 of the following year.

A critical distinction: the 1099-K reports gross payment volume, not net income. Platform fees, processing fees, refunds, and returns are not netted against the gross figure on the 1099-K. Taxpayers who report less income on their return than the 1099-K shows — because fees and adjustments reduce net income — may receive an IRS notice asking about the discrepancy. The correct response is to document the reconciliation between the 1099-K gross and the Schedule C net, showing the deducted fees and adjustments. Income is taxable regardless of whether a 1099-K is issued; all revenue must be reported even if the platform-specific threshold is not met.

This is general tax information, not tax advice. Your situation may differ; consult a licensed CPA before making tax decisions.