How does PayPal report my sales to the IRS? Will I receive a tax Form 1099-K?

PayPal tracks the total payment volume on your account to determine whether it meets the IRS threshold in a calendar year:

  • $20,000 USD in total payment volume from sales of goods or services in a single calendar year and, 
  • 200 payments for goods or services in the same year.
Some US States require merchant reporting at a lower threshold:  
  • Vermont, Massachusetts, Virginia, Maryland: Have a $600 USD total payment volume threshold from sales of goods or services in a single calendar year. That’s regardless of the number of transactions. 
  • Illinois: Has a $1,000 USD total payment volume threshold of goods or services in a single calendar year. And at least 4 payment transactions. 

We may ask you to provide your Taxpayer Identification Number (TIN.) A Social Security Number (SSN), Individual Taxpayer Identification Number (ITIN), or Employer Identification Number (EIN), to your existing account, if you don’t already have one on your account. If your TIN fails verification, you’ll need to complete a substitute Form W-9
 
If you’ve met the state or IRS threshold in a given calendar year, PayPal will send you a Form 1099-K in January of the following year and submit this form with the IRS in March. 

You can access your Form 1099-K from your PayPal account by January 31. 

You can find more information and FAQs by visiting the Tax Help Center.
 

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