Instructions for Form 1099-K (Rev. December 2026)

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Instructions for Form 1099-K
(Rev. December 2026)

Payment Card and Third Party Network Transactions
Section references are to the Internal Revenue Code unless
otherwise noted.

Future Developments

For the latest information about developments related to
Form 1099-K and its instructions, such as legislation enacted
after they were published, go to IRS.gov/Form1099K.
You can get Pub. 1099, General Instructions for Certain
Information Returns, at IRS.gov/1099GeneralInstructions.

What’s New
Exceptions for reporting of third party network trans­
actions. The reporting requirement for these transactions
has changed. A third party settlement organization (TPSO)
is required to report payments in settlement of third party
network transactions with any participating payee that exceed
$20,000, and the total number of such transactions exceeds
200. See Exception for de minimis payment, later, for more
information.
Address fields. For the Filer’s and Payee’s information, we
separated the address fields into individual entry boxes.
New box 1c. P.L. 119-21, section 70201, requires the
reporting of cash tips. This new box was added to facilitate
this reporting requirement for Form 1099-K. For more
information, see the specific instructions for box 1c, later.
New box 1d. Use the Treasury Tipped Occupation Code(s)
to identify the tipped occupation(s) for Form 1099-K. For
more information, see the specific instructions for box 1d,
later.

Reminders
General instructions. In addition to these specific
instructions, you should also use Pub. 1099, General
Instructions for Certain Information Returns. Those general
instructions include information about the following topics.
• Who must file.
• When and where to file.
• Electronic reporting.
• Corrected and void returns.
• Statements to recipients.
• Taxpayer identification numbers (TINs).
• Backup withholding.
• Penalties.
• Other general topics.
Online fillable Copies 1, B, and 2. To ease statement
furnishing requirements, Copies 1, B, and 2 of Form 1099-K
are fillable online in a PDF format, available at IRS.gov/
Form1099K. You can complete these copies online for
furnishing statements to recipients and for retaining in your
own files.
Third party reporting. For more information on third
party reporting, go to IRS.gov/Tax-Professionals/Third PartyReporting-Information-Center-Information-Documents.

Apr 29, 2026

Specific Instructions

A payment settlement entity (PSE) must file Form 1099-K,
Payment Card and Third Party Network Transactions,
for payments made in settlement of reportable payment
transactions for each calendar year. A PSE makes a payment
in settlement of a reportable payment transaction, that is,
any payment card or third party network transaction, if the
PSE submits the instruction to transfer funds to the account
of the participating payee to settle the reportable payment
transaction.
A PSE is a domestic or foreign entity that is a merchant
acquiring entity, that is, a bank or other organization that has
the contractual obligation to make payment to participating
payees in settlement of payment card transactions; or
a TPSO, that is, the central organization that has the
contractual obligation to make payments to participating
payees of third party network transactions.
Note: Healthcare networks, in-house accounts payable
departments, and automated clearing houses do not qualify
as TPSOs and do not report under section 6050W.
A participating payee is any person, including any
governmental unit (and any agency or instrumentality of a
governmental unit) who accepts a payment card, or any
account number or other indicia associated with a payment
card, as payment or accepts payment from a TPSO in
settlement of a third party network transaction.
A payment card is any card, including any stored-value
card (having prepaid value, including gift cards), issued
according to an agreement or arrangement that provides for
all of the following.
• One or more issuers of the cards.
• A network of persons unrelated to each other, and to the
issuer, who agree to accept the cards as payment.
• Standards and mechanisms for settling the transactions
between the merchant acquiring entities and the persons
who agree to accept the cards as payment.
A third party payment network is any agreement or
arrangement that provides for the following.
• The establishment of accounts with a central organization
by a substantial number of providers of goods or services
who are unrelated to the organization and who have
agreed to settle transactions for the provision of the goods
or services to purchasers according to the terms of the
agreement or arrangement.
• Standards and mechanisms for settling the transactions.
• Guarantee of payment to the persons providing goods or
services (participating payees) in settlement of transactions
with purchasers pursuant to the agreement or arrangement.
A third party payment network does not include any
agreement or arrangement that provides for the issuance of
payment cards.
“Unrelated” means any person who is not related to
another person within the meaning of section 267(b) using
the rules of sections 267(c) and (e)(3), and 707(b)(1).

Instructions for Form 1099-K (Rev. 12-2026) Catalog Number 54721E
Department of the Treasury Internal Revenue Service www.irs.gov

For more information, go to IRS.gov/Newsroom/
Form-1099-K-Frequently-Asked-Questions-Filing.
Exception for payments made outside the United
States by U.S. payers or middlemen to offshore
accounts after 2010. For payments under contractual
obligations entered into after December 31, 2010, a PSE that
is a person as described in Regulations section 1.6049-5(c)
(5) as a U.S. payer or U.S. middleman (U.S. payer) is not
required to file Form 1099-K for payments to a participating
payee with a foreign address as long as, prior to payment,
the PSE has documentation on which the PSE may rely to
treat the payment as made to a foreign person according
to Regulations section 1.1441-1(e)(1)(ii) (substituting “payer”
for the term “withholding agent” and without regard to the
limitations to amounts subject to withholding requirements of
chapter 3 of the Code and its regulations).
A PSE that is a U.S. payer may need to file Form 1099-K
for payments made outside the United States to an offshore
account if any of the following apply.
• There is a U.S. residential or correspondence address
associated with the participating payee.
• The PSE has standing instructions to direct the payment to
a bank account maintained in the United States.
• The PSE knows or has reason to know that the
participating payee is a U.S. person.
A PSE is not required to file Form 1099-K for payments
made outside the United States to an offshore account in the
circumstances described in the preceding paragraph if the
PSE does not know that the payee is a U.S. person and the
PSE obtains one of the following from the payee.
• An applicable Form W-8.
• Documentary evidence establishing the payee’s non-U.S.
status.
• A suitable substitute form as described in Notice 2011-71,
available at IRS.gov/irb/2011-37_IRB#NOT-2011-71.
The W-8 forms (or the suitable substitutes) must be collected
by the PSE no later than 90 days after the date on which
the PSE enters into the contractual obligations with the
participating payee. The W-8 forms (or suitable substitutes)
and documentary evidence may be relied upon only when
the requirements described in Notice 2011-71 are satisfied.
A PSE does not have to file Form 1099-K for payments
made outside the United States (within the meaning of
Regulations section 1.6049-5(e)) to an offshore account
(as described in Notice 2012-2, available at IRS.gov/irb/
2012-45_IRB#NOT-2012-2) of a participating payee with only
a foreign address if the name of the participating payee
indicates that it is a per se corporation under Regulations
section 301.7701-2(b)(8)(i) and the PSE does not know or
have reason to know that the participating payee is a U.S.
person.
A PSE may apply the grace period rules under
Regulations section 1.6049-5(d)(2)(ii) for payments to a
participating payee with only a foreign address without regard
to whether the amounts paid are described in Regulations
section 1.1441-6(c)(2) or are reportable under Code section
6042, 6045, 6049, or 6050N.
Alternative method for PSE that does not maintain
account for participating payee. The above exception to
reporting only applies if the PSE is a U.S. payer making a
payment to an account maintained outside the United States
by the PSE, or, if the PSE does not maintain an account
for the payee, to another financial institution maintaining the
account outside the United States. To apply the exception,
for a PSE that does not maintain an account for the
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payee, the PSE must also reasonably determine that the
participating payee is doing business outside the United
States based on all the information obtained or reviewed
in connection with the establishment or maintenance of
the contractual relationship with the participating payee
(including information required to be obtained or reviewed
under procedures required to be established under and
compliant with 31 CFR section 1020.220).
Exception for payments by U.S. payers to foreign
payees prior to 2011. For payments under contractual
obligations entered into before January 1, 2011, that are not
materially modified on or after January 1, 2011, a PSE that is
a U.S. payer or U.S. middleman is not required to file a Form
1099-K for a payment to a participating payee with a foreign
address as long as the payer does not know or have reason
to know that the participating payee is a U.S. person.
A “foreign address” means any address that is not within
the United States (the states and the District of Columbia).
Exception for payments made by non-U.S. payers or
middlemen to foreign payees. A PSE that is not described
as a U.S. payer or U.S. middleman in Regulations section
1.6049-5(c)(5) (non-U.S. payer) is not required to file a Form
1099-K for payment to a participating payee that does not
have a U.S. address as long as the PSE does not know or
have reason to know that the participating payee is a U.S.
person. If the participating payee has any U.S. address, the
PSE may treat the participating payee as a foreign person
only if the PSE has documentation on which the PSE may
rely to treat the payment as made to a foreign person
according to Regulations section 1.1441-1(e)(1)(ii).
A PSE that is a non-U.S. payer that has reason to know
but not actual knowledge that a participating payee is a U.S.
person will not be required to file Form 1099-K if the PSE
obtains from the payee a Form W-8 or documentary evidence
that satisfies the requirements described in Notice 2011-71.
A PSE may accept a substitute form, as described
in Notice 2011-71, in lieu of Form W-8BEN so that
a participating payee can certify its non-U.S. status.
Documentary evidence, described in Notice 2011-71,
submitted to establish the identity of the payee and the status
of that person as a foreign person remains valid until the
earlier of the last day of the third calendar year following the
year in which the documentary evidence is provided to the
withholding agent or the day that a change in circumstances
occurs that makes any information on the documentary
evidence incorrect.
A U.S. address is any address that is within the United
States (the states and the District of Columbia).
Nonreportable transactions. The following transactions
are nonreportable under section 6050W.
• A withdrawal of funds at an automated teller machine
(ATM) via payment card, or a cash advance or loan against
the cardholder’s account.
• A check issued in connection with a payment card that is
accepted by a merchant or other payee.
• Any transaction in which a payment card is accepted as
payment by a merchant or other payee who is related to the
issuer of the payment card.
Conversion of amounts paid in foreign currency. When
a payment is made or received in a foreign currency, the
U.S. dollar amount must be determined by converting the
foreign currency into U.S. dollars on the date of transaction
at the spot rate (as defined in Regulations section 1.988-1(d)
(1)) or according to a reasonable spot rate convention, such
Instructions for Form 1099-K (Rev. 12-2026)

as a month-end spot rate or a monthly average spot rate.
The convention must be used consistently for all non-dollar
amounts reported and from year to year. The convention
cannot be changed without the consent of the Commissioner
or his or her delegate.
Reporting under sections 6041, 6041A, and 6050W.
Payments made by payment card or through a third party
payment network after December 31, 2010, that otherwise
would be reportable under sections 6041 (payments made
in the course of a trade or business to another person) or
6041A(a) (payments of remuneration for services and certain
direct sales) and 6050W are reported under section 6050W
and not section 6041 or 6041A. For purposes of determining
whether payments are subject to reporting under section
6050W, rather than section 6041 or 6041A, the de minimis
threshold, discussed later under Box 1a, is disregarded.

Who Must File

Every PSE or other party which submits instructions to
transfer funds to the account of a participating payee, in
settlement of reportable payment transactions, must file
an information return (Form 1099-K) with respect to each
participating payee for that calendar year.
Multiple PSEs. If two or more persons qualify as PSEs for
the same reportable transaction, the PSE that submits the
instruction to transfer funds must file the return and furnish
the payee statement. However, the PSE obligated to file may
designate another person to file the return and furnish the
payee statement, including the PSE not making payment, if
the parties agree in writing. If the designated person fails to
timely file the return and furnish the payee statement, the
entity with the responsibility to file and furnish is liable for any
applicable penalties under sections 6721 and 6722.
Electronic payment facilitator (EPF). If a PSE contracts
with an EPF or other third party to make payments in
settlement of reportable payment transactions on behalf of
the PSE, the facilitator or other third party must file Form
1099-K in lieu of the PSE. The facilitator is not required to
have any arrangement or agreement with the participating
payee. Payments need not come from the facilitator’s
account. The facilitator need only submit instructions to
transfer funds to the account of the participating payee.
The PSE can file Form 1099-K by designation if the parties
agree in writing; however, the designation does not relieve
the facilitator from liability for any applicable penalties under
sections 6721 and 6722 for failure to comply with the
information reporting requirements.
See part O in Pub. 1099 for more information on penalties.
Aggregated payees. If you receive payments from a PSE
on behalf of one or more participating payees and you
distribute such payments to one or more participating
payees, you are:
• The participating payee with respect to the PSE who sent
you the payment(s), and
• The PSE with respect to the participating payees to whom
you distribute the payments.
For more information on nominee/middleman reporting,
see part A in Pub. 1099.

form may truncate a payee’s TIN (social security number
(SSN), individual taxpayer identification number (ITIN),
adoption taxpayer identification number (ATIN), or employer
identification number (EIN)) on payee statements. Truncation
is not allowed on any documents the filer files with the IRS.
A filer’s TIN may not be truncated on any form. See part J in
Pub. 1099.
Furnishing statements electronically. Statements may
be furnished to payees electronically in lieu of a paper
format. See Regulations section 1.6050W-2(a) for further
information.
For more information about the requirement to furnish a
statement to each payee, see part M in Pub. 1099.

2nd TIN Not. Box

You may enter an “X” in this box if you were notified by the
IRS twice within 3 calendar years that the payee provided an
incorrect TIN. If you mark this box, the IRS will not send you
any further notices about this account.
However, if you received both IRS notices in the same
year, or if you received them in different years but they
both related to information returns filed for the same year,
do not check the box at this time. For purposes of the
two-notices-in-3-years rule, you are considered to have
received one notice and you are not required to send a
second “B” notice to the taxpayer on receipt of the second
notice. See part N in Pub. 1099 for more information.

Tip: For information on the TIN Matching System offered by
the IRS, see Pub. 1099.

FILER’S Name, Address, Telephone Number,
and TIN Boxes

Enter the name, address (including street address, city or
town, state or province, country, ZIP or foreign postal code),
and telephone number of the entity with the filing requirement
(payer) in the boxes in the upper left corner. The telephone
number must allow a payee to reach a person knowledgeable
about the payments reported on the form. Enter the Filer’s
TIN and the Payee’s TIN in the boxes above Payee’s name.

Country

For a list of country codes, go to IRS.gov/CountryCodes.

FILER Checkboxes

Check the first (top) box in the section immediately below
the state or province, country, and ZIP or foreign postal code
boxes if the entity with the filing requirement (payer) is a PSE.
Check the second (bottom) box if the entity with the filing
requirement (payer) is an EPF or other third party.
If the entity with the filing requirement (payer) is an EPF
or other third party, enter the PSE’s name and telephone
number in the box above the “Account number” box at the
bottom left of the form. The telephone number must allow a
payee to reach a person knowledgeable about the payments
reported on the form.

Transactions Reported Checkboxes

If you are required to file Form 1099-K, you must furnish a
statement to the payee.

Check the first (top) box if you are reporting payment card
transactions on this form. Check the second (bottom) box
if you are reporting third party network transactions on this
form.

Truncating recipient’s TIN on payee statements.
Pursuant to Regulations section 301.6109-4, all filers of this

If you are reporting payments to the same payee
that include both payment card and third party network

Statements to Payees

Instructions for Form 1099-K (Rev. 12-2026)

3

transactions, you must file a separate Form 1099-K reporting
the gross amount from each type.

Account Number

The account number is required if you have multiple accounts
for a payee for whom you are filing more than one Form
1099-K. Additionally, the IRS encourages you to designate an
account number for all Forms 1099-K that you file. See part L
in Pub. 1099.

Box 1a. Gross Payment Card/Third Party
Network Transactions

Enter in box 1a the gross amount of the total reportable
payment card/third party network transactions for the
calendar year. “Gross amount” means the total dollar amount
of total reportable payment transactions for each participating
payee without regard to any adjustments for credits, cash
equivalents, discount amounts, fees, refunded amounts,
shipping amounts, or any other amounts. The dollar amount
of each transaction is determined on the date of the
transaction.

Exception for de minimis payments. A TPSO is required
to report any information concerning third party network
transactions of any participating payee only if for the calendar
year:
• The gross amount of total reportable payment transactions
exceeds $20,000, and
• The total number of such transactions exceeds 200.
For examples of reportable payment transactions,
including responsible filing parties, see Regulations section
1.6050W-1(e).

Box 1b. Card Not Present Transactions

Enter in box 1b the gross amount of the total reportable
payment card/third party network transactions for the
calendar year where the card was not present at the time
of the transaction or the card number was keyed into the
terminal. Typically, this relates to online sales, phone sales,
or catalogue sales. “Gross amount” means the total dollar
amount of total reportable payment transactions for each
participating payee without regard to any adjustments for
credits, cash equivalents, discount amounts, fees, refunded
amounts, shipping amounts, or any other amounts. The dollar
amount of each transaction is determined on the date of the
transaction.

Box 1c. Cash Tips

Enter in box 1c the total amount of cash tips included in
box 1a.

Box 1d. Treasury Tipped Occupation Code(s)
(TTOC)

Enter in box 1d the TTOC for the payee’s tipped
occupation(s). Enter up to two code(s) based on the
occupation(s) that the tips were received in. If tips were
received in more than two occupations, include the TTOC
for any two of the three or more occupations in which tips
were received. If any tips were received in a nonqualifying
occupation, then "000" must be input as one of the
occupation code(s). See IRS.gov/TippedOccupations for the
applicable code(s).

4

Box 2. Merchant Category Code

Enter the four-digit merchant category code (MCC) used
by the payment card industry to classify the payee for the
payment card transactions reported on this Form 1099-K.
If you or the entity on whose behalf you are filing uses an
industry classification system other than, or in addition to,
MCCs, assign to each payee an MCC that most closely
corresponds to the description of the payee’s business.
Note: If you or the entity on whose behalf you are filing is a
TPSO or does not use any industry classification system for
its payees, you should not complete this box.
If a payee has receipts classified under more than one
MCC, you may either:
• File separate Forms 1099-K reporting the gross receipts
for each MCC, or
• File a single Form 1099-K reporting total gross receipts
and the MCC which corresponds to the largest portion of the
total gross receipts.

Box 3. Number of Payment Transactions

Enter the number of payment transactions (not including
refund transactions) processed through the payment card/
third party payer network.

Box 4. Federal Income Tax Withheld

Enter backup withholding. Persons who have not furnished
their TINs to you in the manner required are subject to
backup withholding on payments required to be aggregately
reported in box 1a.
A payment made by a TPSO is a reportable payment
potentially subject to section 3406 backup withholding.
For more information on backup withholding, including the
applicable rate, see part N in Pub. 1099.

Boxes 5a Through 5l

Enter in the appropriate box the gross amount of the total
reportable payment transactions for each month of the
calendar year.

Boxes 6 Through 8. State Information

These boxes may be used by filers who participate in
the Combined Federal/State Filing Program and/or who
are required to file paper copies of this form with a
state tax department. See Pub. 1220 for more information
regarding the Combined Federal/State Filing Program. They
are provided for your convenience only and need not be
completed for the IRS. Use the state information boxes to
report payments for up to two states. Keep the information for
each state separated by the dash line. If you withheld state
income tax on this payment, you may enter it in box 8. In
box 6, enter the abbreviated name of the state. In box 7, enter
the filer’s state identification number. The state number is the
filer’s identification number assigned by the individual state.
If a state tax department requires that you send them a
paper copy of this form, use Copy 1 to provide information to
the state tax department. Give Copy 2 to the payee for use in
filing the payee’s state income tax return.

Instructions for Form 1099-K (Rev. 12-2026)