1099-K help needed

[saronafarrell]

I thought PayPal would send my subcontractor a 1099-K for the invoices I paid in tax year 2022, but it seems they haven't. What do I do now?

[PayPal_JonK]

Hello @saronafarrell, 

Welcome to the PayPal Community. I'm sorry to hear you've run into some confusion for regarding our 1099-K process. PayPal will only initiate a 1099-K for the payments you've received, and only over a certain level of payments received. You can find more information about that levels here: Will PayPal report my sales to the IRS?
 

If you need to send your subcontractor a 1099 for their work, your best resources would be found on irs.gov. You may want to consult a tax professional as well to make sure you're sending the proper 1099. 

Good luck with this and your future business with PayPal, 

 - Jon K

[saronafarrell]

Thank you, that makes sense. I thought I read that PayPal would issue the 1099 (for tax year 2022) if the person was paid $20K+  and 200+ transactions. And that next year the threshold will be down to $600. Is that your understanding? Assuming I pay more than $600 in 2023, then PayPal will send them the 1099-K? 

[PayPal_JonK · Accepted solution]

Hi again @saronafarrell, great question!

Yes, there have been some recent changes for the tax year 2022 which were then turned back and postponed to tax year 2023. That article linked above should have the most accurate and up-to-date info available.

Currently, if a recipient received more than $20,000 USD in gross sales from goods or services AND more than 200 transactions in the 2022 calendar year, they'll receive a 1099-K from PayPal this year, 2023. If a recipient receives over $600 in Goods and Services transactions in 2023, they'll receive a 1099-K from PayPal in 2024.

I hope that clears everything up,

- Jon K

[saronafarrell]

Thanks @PayPal_JonK

Appreciate the clarification.

Cheers

Sarona

[Tc74]

1099-k. What exactly is this

[saronafarrell]

It's the 1099 form that's given by third party service providers like PayPal and Venmo etc..