Form 1099-K is an IRS-required information return that reports the gross amount of reportable payment transactions processed through third-party platforms like Stripe. As part of our partnership with Stripe and compliance with IRS regulations, it's important to understand how this form works, who receives it, and what to do if there are issues.

Form 1099-K reflects the total gross volume of payment card transactions processed through Stripe over a calendar year. This includes the actual transaction amount, but also any Stripe processing and currency conversion fees, shipping costs, taxes, refunds, and adjustments. None of these are subtracted from the total when calculating the gross volume.

The IRS uses this form to ensure tax compliance for businesses that receive payments through platforms like Stripe. Companies are required to collect and maintain accurate tax information, such as the legal business name, Taxpayer Identification Number (TIN), and mailing address, at the time of onboarding.

Failure to do so can result in penalties. Penalties may range from $50 to $280 per form for errors such as not filing on time, not providing the form to recipients, or submitting incomplete or incorrect information. Larger fines may apply if there's evidence of willful neglect or intentional disregard of the IRS rules.

Xplor sends out Form 1099-K by January 31st each year, covering the previous calendar year’s transactions. These forms are mailed to the address on file in your Stripe Connect Express account, addressed to the listed account owner or legal business entity.

If you have not received your form by February 28th, we recommend checking that your Stripe account contains the correct name and mailing address. If everything is up to date and you still haven’t received it, please reach out to our support team at support@marianatek.com for assistance.

The eligibility to receive a 1099-K is based on IRS and state-level reporting thresholds. According to federal guidelines, a business will receive a 1099-K if it has over $20,000 in gross payments and more than 200 transactions in a calendar year. However, this threshold is subject to change, and starting in 2022, the IRS plans to require 1099-Ks for businesses with more than $600 in gross volume, regardless of transaction count.

Some states have their requirements, including:

Only U.S.-based businesses qualify for 1099-K reporting through Stripe. We do not issue 1099-Ks to foreign businesses at this time.

Stripe determines which transactions are reported on the 1099-K. Only credit card transactions are included—ACH or cash sales are excluded. This can sometimes be confusing if you attempt to reconcile the 1099-K with your internal sales reports, which may include all transaction types.

Each transaction is recorded using the transaction date, not the settlement or payout date. Stripe includes the gross amount, prior to any deductions, so the total reported may appear higher than your net income.

If you need help understanding the details of what was included in your 1099-K, Stripe provides several helpful articles:

If your business experienced a change in ownership or a new EIN was issued but you continued processing payments under the original Stripe account, we are unable to revise the 1099-K. This is because the original form is tied to the original account and legal entity.

Each legal business entity must have its own Stripe Merchant Account for tax reporting purposes. If a new owner takes over or your business is restructured, please notify our support team. We’ll assist in closing the old Stripe account and setting up a new one under the updated legal name and EIN.

If you're having trouble locating your 1099-K, verifying its contents, or understanding whether you qualify, we're here to help. Contact our support team at support@marianatek.com, and we’ll guide you through it.