How does PayPal report my sales to the IRS? Will I receive a tax Form 1099-K?
PayPal will track the payment volume of your account to check whether your payment volume exceeds both of these levels in a calendar year:
- $20,000 USD in gross payment volume from sales of goods or services in a single calendar year
- 200 payments for goods or services in the same year
- Vermont, Massachusetts, Virginia, Maryland: $600 USD in gross payment volume from sales of goods or services in a single calendar year regardless of the number of transactions;
- Illinois: $1,000 USD in gross payment volume from sales of goods or services in a single calendar year with at least 3 payment processed
You may be asked to provide your tax identification number (TIN), such as a Social Security Number (SSN) or Employer Identification Number (EIN), to your existing account, if you don’t already have one on file. If your TIN fails verification, you’ll need to fill out an equivalent tax form W-9.
If you cross the IRS thresholds in a given calendar year, PayPal will send Form 1099-K to you and the IRS for that tax year, the following year.
You can access your 1099-K from your PayPal account by January 31st annually. Only those customers that meet the 1099-K eligibility requirements will see the 1099-K available for download in their account.
If there are any discrepancies between what is reported by the IRS for your tax identification number and name and what PayPal has on file and used for Form 1099-K, you may receive an IRS B-Notice.
You can find more information and FAQs by visiting the PayPal tax website.
*Except in Vermont and Massachusetts where the threshold is lower irrespective of the number of transactions.