1099-K Reporting Requirements
The United States Government has enacted a law (Internal Revenue Code Section 6050W) which requires payment processors to send an IRS Form 1099-K annually, to all US Sellers starting with 2011.
Form 1099-K, Payment Card and Third Party Network Transactions, is an IRS information return used to report certain payment transactions to improve voluntary tax compliance.
Read the instructions below on how to update your 2Checkout account to meet these requirements.
2Checkout will ask affected Sellers/Merchants to confirm and/or update their 2Checkout account by providing a tax ID number and the appropriate corresponding contact information.
Your tax ID number is one of these:
• Your Social Security Number (SSN)
• Your Employer Identification Number (EIN)
• Your Individual Tax Identification Number (ITIN)
Please use the guidelines below to determine which tax ID number to provide.
Business Entities with an EIN
Provide your company EIN and company name.
Sole Proprietors with an EIN
Provide your company EIN and your own name.
Individual Sellers and Sole Proprietors without an EIN
Provide your SSN or ITIN and your own name.
2Checkout will also need affected Sellers/Merchants to confirm that their account name matches the tax ID number provided and to confirm their physical address so that if Form 1099-K is issued, we can report your information accurately to the IRS.
Updating the 2Checkout account
Follow these steps to update your 2Checkout account in order to meet the fiscal compliance requirements.
- Log in to your 2Checkout account at https://secure.2checkout.com/cpanel
- Click the Settings tab.
- Click the Edit Account information tab.
- Confirm your account information is correct.
- Click the Save button at the bottom of the page.
- Confirm that the Company Name listed is correct. If your company is incorporated, make sure that the company name listed on your 2Checkout Account is exactly as it is listed on your incorporation documents. If your Company name is incorrect on this page, send an email to firstname.lastname@example.org for assistance in updating this field.
- Confirm that the Business Office E-mail, Mailing Address, and Physical Address listed on the account are correct. Update if necessary. If the physical address listed on this page is incorrect, send an email to email@example.com for assistance in updating this field.
10. Click the Save button at the bottom of the page.
Below are some common questions from our merchants:
How do I receive my 1099-K Form?
The platform will automatically generate the PDF for the 1099-K form for all vendors. The merchant will receive an email notification that the file was generated and will be able to download the file from their Control Panel: Account information → Edit account information.
Every year 2Checkout will generate a file for the IRS that will contain all payments from the previous year.
What if I don’t provide my Tax ID number?
If 2Checkout is unable to verify your information because it is incorrect or incomplete, your account will be put in a Restricted status, so you will not be able to receive payouts. The restriction will end once you provide your tax ID number and corresponding contact information, and your information is verified by the IRS matching system.
If you need additional information about this law you can read more details on the IRS website.