Handbook / Self-employment tax and 1099s

Form 1099-K for the 2026 tax year: payment apps, marketplaces and card payments

Tax-year note: Tax information on this page applies to the 2026 tax year (returns filed in 2027), from IRS pages checked in November 2026. Figures and dates are labelled with their tax year where they appear. Check current IRS pages before you rely on them.

If clients pay you by card, through a payment app or via an online marketplace, you may receive a Form 1099-K. It often causes confusion because it shows gross payments, which can look very different from your actual income. This guide explains who sends it for the 2026 tax year and how to handle it.

What the form reports

Form 1099-K reports payments you received through:

• payment card transactions, such as credit and debit cards, processed by a payment settlement entity
• third-party payment networks, such as payment apps and online marketplaces

It reports the gross amount of payments, before fees, refunds, chargebacks or shipping costs are taken out.

Who gets one for 2026

According to the IRS, for the 2026 tax year:

• Payment apps and online marketplaces are required to send a 1099-K when payments for goods or services exceed $20,000 in more than 200 transactions. They may still send one for lower amounts.
• Card payments: the IRS says you should receive a 1099-K for payment card transactions regardless of the number or amount.

The IRS says the recipient copy is due by January 31.

Personal payments do not belong

The IRS states that payments from friends and family, such as gifts, repaying a shared meal or splitting rent, are not reportable on Form 1099-K. If you use one app for both business and personal money, those personal transfers can get mixed in. Keep separate business and personal accounts where the app allows, and use the correct payment type.

Selling personal items at a loss, such as used household goods, is also not business income, but you should keep records showing what you paid.

Reporting income

The key rule: report all business income. The IRS gig work guidance says you must report income even if you do not receive a Form 1099. A 1099-K is a cross-check, not the measure of what you owe.

Sole proprietors and single-member LLCs report business income on Schedule C. The guide to Schedule C explains where gross receipts go.

Reconciling the form with your books

Your 1099-K total will usually differ from your net income. Typical reasons:

• processing fees deducted before payout
• refunds and chargebacks
• sales tax or shipping collected
• the same client also paying you in other ways
• personal payments mistakenly included

To reconcile:

1. Pull the payment platform's annual report.
2. Compare gross totals with the 1099-K.
3. Record fees as expenses and refunds as reductions in income.
4. Keep the reconciliation with your tax records.

Report your gross receipts correctly and deduct fees and other costs as expenses. Keeping clear records means a mismatch between a form and your return can be explained.

Avoid double counting

If a client pays you through a platform and also issues you a 1099-NEC for the same work, the same money could appear twice. Count it once in your income and keep records explaining both forms. The guide to Form 1099-NEC covers that form.

Wrong or unexpected forms

If a 1099-K is wrong, for example showing personal payments, someone else's sales or the wrong TIN, contact the issuer listed on the form and ask for a corrected form. Keep notes and records either way.

Using platforms

Marketplace and freelance platforms are a common source of 1099-Ks. The guide to freelance platforms covers fees and records to keep from them.

What is on the form

A Form 1099-K shows, among other things:

• the filer's name, such as the payment processor or marketplace
• your name and taxpayer identification number
• the gross amount of payment transactions for the year
• the number of transactions
• monthly gross amounts
• any federal income tax withheld

Check each box against your records. Monthly figures are useful for matching to your bank deposits. If federal income tax was withheld, for example because your taxpayer identification number was missing, you can claim it on your return. Keep the form, the platform's annual summary and your reconciliation together with your tax records for the year.

For the 2026 tax year, apps and marketplaces must report above $20,000 and 200 transactions, card processors report regardless of amount, and you report all business income either way. Reconcile gross figures with your books and keep personal payments separate.