What the 1099-K is
Form 1099-K reports payments you received for goods or services through a payment card (credit or debit cards) or a third-party payment network, such as payment apps, online marketplaces and many gig platforms. The company that processed the payments sends one copy to you and another to the IRS.
For drivers and delivery workers, some apps use the 1099-K to report what customers paid for your rides or deliveries, sometimes together with a 1099-NEC for other payments like bonuses.
The current threshold
Payment apps and online platforms only have to send a 1099-K when, in one calendar year, you received more than $20,000 AND more than 200 transactions through them. A 2025 law restored this threshold after years of changes, and it applies to 2026.
Two exceptions to keep in mind:
- Payments by card have no minimum. If customers paid you directly by credit or debit card, the card processor reports any amount.
- Some states have lower thresholds, so you might receive a 1099-K for less than the federal amount.
And the most important point: the threshold decides when a form is sent, not whether you owe tax. All of your business income is taxable, with or without a 1099-K.
Why the 1099-K amount is often higher than what you earned
The 1099-K shows gross payments: the total that went through the platform before anything was taken out. That can include:
- Fees and commissions the platform kept, which you can deduct as business expenses.
- Refunds you gave back to customers.
- Sales tax or other amounts collected on behalf of someone else.
- Tips, depending on the platform. Starting with 2026, the form lists cash tips separately in box 1c, with your tipped occupation code in box 1d, for the tips deduction. Tips are income either way.
Before you file, compare the form with your own records or the annual summary in each app, and make sure your reported income and your deductions tell the full story.
What is not taxable
A payment on a 1099-K is not automatically income. These usually are not taxable:
- Gifts and reimbursements between friends or family, such as splitting rent or a dinner bill. These should not be reported on a 1099-K at all, because they are not payments for goods or services.
- Personal items sold at a loss, like used furniture sold for less than you paid. The loss is not deductible, but you report the amount and an equal adjustment on Schedule 1 so it nets to zero.
Personal items sold at a gain are taxable as capital gains, and business sales go on Schedule C.
Where to report it
- Business or gig income goes on Schedule C, together with your expenses. If you drive for an app, our gig driver tax calculator shows what to set aside after mileage.
- Personal items and amounts that are not income are handled on Schedule 1 (or Form 8949 and Schedule D if you sold something at a gain).
If you receive a 1099-K and a 1099-NEC for the same payments, report the income once and keep records showing the overlap.
If the form is wrong
Contact the company that issued it and ask for a corrected form. The IRS cannot correct a 1099-K for you. If the company does not fix it in time, report the correct amounts on your return and keep documentation that explains the difference.
New to self-employment? Our beginner’s guide to 1099 taxes covers the basics.