The short answer
Form 1099-K is the IRS form used to report payment card and third-party network payments. Your payment processor (Stripe, Square, PayPal, etc.) files one per merchant account each year for every merchant that crosses the volume threshold.
In plain English
The IRS wants to know how much each merchant is processing via cards + third-party networks. Processors are required to report that volume via 1099-K to both the merchant and the IRS. It's not a new tax — it's reporting that helps the IRS match your tax return against what was processed.
How it shows up in your business
- Your processor sends you a 1099-K by January 31 covering the prior tax year.
- The IRS gets the same form.
- Your reported income needs to match (or reasonably explain the delta).
- Multiple merchant accounts = multiple 1099-Ks — each gets filed separately.
- Refunds and reversals are reported gross (the original charge), not net.
Numbers to know
Threshold (rolling changes):
- Pre-2024: $20k + 200 transactions
- 2024: $5,000 (no transaction minimum)
- 2025: $2,500 (phased per IRS schedule)
- 2026 planned: $600 (per original TCJA provision; multiple delays possible)
The threshold has been a moving target. IRS has delayed implementation multiple times due to industry pushback. Check current-year guidance from the IRS before tax filing.
Form fields include: gross amount processed (before fees), # of transactions, tax ID of the merchant, payment card type breakdown. Fees are NOT subtracted — you report gross, deduct fees on your return.
Why multi-brand operators care
Each merchant account generates its own 1099-K, filed to the legal entity owning that account. Running 4 brands on 4 merchant accounts = 4 separate 1099-Ks (one per entity). Running 4 brands on a parent merchant account = 1 1099-K filed to the parent entity, with per-brand revenue shown in the consolidated ledger for your own reporting + separate sub-entity allocation.
Consolidation to a parent simplifies 1099-K handling at tax time but requires your accountant to allocate revenue to each sub-brand's entity correctly. Most multi-brand operators find this trade favorable; talk to your CPA before restructuring.