Find out about IRS reporting requirements for payment processing accounts including details on Form 1099-K.
| Update: If you previewed your Form 1099-K prior to January 12th, you may have seen a form based on the previously expected $600 reporting threshold. We’re updating our records to ensure forms reflect the prior reporting threshold of $20,000 in payments and 200 transactions. We'll generate a Form 1099-K if you meet the threshold. You can download it from the Merchant Service Center by January 31 of the next year. |
IRS Requirements for Merchant Processing
IRS Section 6050W of the IRS Code requires payment providers, like Intuit, to report payment card and third party network transactions. As your reporting entity, we are required to file an annual information return with the IRS and provide you with a Form 1099-K. Form 1099-K reports the gross amount of reportable transactions for both the calendar year and its corresponding months to the IRS.
For tax year 2022, you'll get a Form 1099-K if the gross amount of aggregate payments exceeds $20,000 and the number of such transactions exceeds 200.
Starting in tax year 2023, you'll get a Form 1099-K if the gross amount of aggregate payments is $600 or more. It won't matter how many transactions there are.
We'll generate a Form 1099-K if you meet the threshold. You can download it from the Merchant Service Center by January 31 of the next year. In April of each year, QuickBooks Payments files a copy of the 1099-K with the IRS. We need your tax filing name and Taxpayer ID Number (TIN). It can also be your Employee Identification Number (EIN). If the info on your merchant account is wrong, we'll contact you for your taxpayer information.
Note: If you have missing or incorrect TINs or your Legal Business Name(s) and TIN don't match the IRS, you may be subject to federal and state backup withholding from the gross sales amount of your reportable transactions. The federal withholding rate is currently 24%.
For additional info, check out http://www.irs.gov. QuickBooks Payments can't provide tax or legal advice. Check with your tax or legal advisor to see how these regulations may affect your business.
IRS Section 6050W Frequently asked questions
What's IRS 6050W?
IRS Section 6050W took effect on January 1, 2011. It describes the IRS reporting requirements. 6050W requires payment providers, like QuickBooks Payments, to report the total gross sales volume of merchant payment card transactions to the IRS.
Our goal is to help our customers understand the requirements and how it may impact you. QuickBooks Payments needs to make sure our files reflect the correct Taxpayer Identification Number and Tax Filing Name for your business. Both pieces of information must match what the IRS has on file for your business.
If you're an Individual, Single-member LLC, or Sole proprietorship, your Legal Business Name should match your personal name. Your Taxpayer Identification Number (TIN) should be your Social Security Number (SSN), Individual Taxpayer Identification Number (ITIN) or Employer Identification Number (EIN), if you have one.
For other entities, the Legal business name on your account and your TIN (or EIN) must match what's on file with the IRS. If you need to verify what’s on file with the IRS, check your SS4 EIN Assignment Letter or contact the IRS at 800-829-4933 and ask for a letter 147C.
Will all merchants receive a Form 1099-K?
No. For tax year 2022, you'll get a Form 1099-K if the gross amount of aggregate payments exceeds $20,000 and the number of such transactions exceeds 200.
Starting in tax year 2023, you'll get a Form 1099-K if the gross amount of aggregate payments is $600 or more. It won't matter how many transactions there are.
We'll generate a Form 1099-K if you meet the threshold. You can download it from the Merchant Service Center by January 31 of the next year.
Check out Intuit Form 1099-K for more info on 1099-K.
What happens if my taxpayer info doesn't match what the IRS has on file?
If your taxpayer info doesn't match, QuickBooks Payments may be required to withhold a percentage of your card sales. (Currently, the rate is 24% for federal, in addition to any applicable state withholding requirements.) Any withholding will appear on your Form 1099-K. It's our understanding withheld amounts can only be refunded by the IRS after you file your federal tax returns. Intuit can't edit prior tax year 1099-K forms once submitted to the IRS at the end of tax season. To receive help, reach out to your tax professional or call the IRS at 800-829-4933.
How do I find out what the IRS has on file as my Legal business name and TIN?
You can contact the IRS at 800-829-4933 to request a letter 147C or refer to your IRS SS4 EIN Assignment Letter. You may also refer to your last business tax return or contact your tax professional.
Where can I validate that this reporting is required?
Check out the IRS website: http://www.irs.gov.
Will QuickBooks Payments validate my taxpayer info with the IRS?
Yes. When you complete a Merchant application, QuickBooks Payments will compare the info provided on the application to the info on file at the IRS.
If my taxpayer info doesn't match with the IRS, will I be notified?
Yes. QuickBooks Payments will try to notify you if we believe the taxpayer info we have on file is incorrect. We’ll also ask for your help to obtain the correct data.
Will QuickBooks Payments help me with my tax return?
While we're committed to helping you understand the 6050W requirements and your Form 1099-K, QuickBooks Payments isn't qualified to give you specific tax guidance. For tax help, you should contact a tax professional.