Form 1099-K tax reporting with Shopify Payments for the United States

Under United States (US) tax laws, Payment Settlement Entities (PSEs) are required to file a Form 1099-K regarding merchants who meet annual reporting thresholds with the United States Internal Revenue Service (IRS) and, where applicable, to state revenue authorities. If your business accepts online or in-person payments, then you must learn how to use your Form 1099-K, as you're responsible for reporting this income on your tax returns. Failure to comply with reporting requirements can result in penalties and fines from your tax authorities.

As a merchant, you're required to follow all applicable regulations, including tax reporting. Depending on your jurisdiction, Shopify Payments might also be required to report your sales to the local tax authorities. You're responsible to consult with local tax authorities or a tax professional to verify the regulations that apply to you.

This guide explains what a Form 1099-K is, what the criteria for receiving a Form 1099-K are, and how to download your form from your Shopify admin.

Understanding your Form 1099-K

Form 1099-K is an informational document required by the United States' IRS for accounts that meet specific criteria. The form summarizes the Shopify Payments transactions of an account and is provided to both you - the account owner - and the IRS to assist you in reporting your taxes. Shopify Payments issues a Form 1099-K to all Shopify Payments users, based in the United States, who accept payments, regardless of their business type or activity, and have met that year’s criteria.

For example, if you run an online business and use Shopify Payments to receive payments from customers, then Shopify provides a Form 1099-K if your transactions meet the reporting threshold in that year. The form reports the gross amount of payments that you received through Shopify Payments during the year.

For more help understanding your 1099-K, go to IRS.gov, where you can download a blank example of the form.

Criteria for receiving a Form 1099-K

Shopify is required to submit a Form 1099-K to the IRS for transactions that you process through Shopify Payments. You might be required to report these values when you file your income taxes. This form is generated by Shopify Payments and it's provided to you and to the IRS annually. Only store owners can access information that's related to the Form 1099-K.

In the United States, the tax year covers the period of January 1 in a given year, until December 31 of that year. Your payment settlement entity is required to file a Form 1099-K to the IRS if any of the following considerations apply to your account:

For Tax Year 2023, the IRS threshold to qualify for a Form 1099-K was processing more than $20,000 USD in funds and processing more than 200 transactions. If you meet this threshold requirement for 2023, the Form 1099-K is available in your admin.
Starting with Tax Year 2024, the IRS thresholds are different. To qualify for 1099-K reporting, you must process more than $5,000 USD in gross transactions.
You meet your state's individual thresholds.

The Form 1099-K issued to you by Shopify, accounts only for transactions that have been processed by Shopify Payments.

Form 1099-K availability

If you meet the criteria for Form 1099-K, then the form is delivered between January 31st and February 28th for the previous calendar year’s transactions. If you’re the account owner, then you receive an email notifying you that the Form 1099-K is ready in the Finance section of your Shopify admin.

Tax information and Form 1099-K

The tax information that you add to your Shopify Payments account during setup is reviewed in advance of your Form 1099-K being issued. If the review highlights any incorrect or missing information, then you receive notification at the store owner's email address, in your admin notifications, and in the Payments section of your admin, to update your details.

Update your tax information

Shopify reviews tax information, such as your Social Security Number (SSN) or Employer Identification Number (EIN), before issuing your Form 1099-K. If there's tax information missing or tax information that can't be verified in your Shopify Payments account, then you receive a notification by email, admin alert, and banner in your Shopify admin where you can update your information.

Steps

From the email, admin notification, or banner in your Shopify admin, click Update details.
On the Update details page, review the fields containing errors and update them with the correct information.
Click Save.
Click Confirm.
Click Submit for verification.

If the information you add cannot be verified, then you receive further notification to update your details the correct tax information. If you exceed the allowed number of attempts, then you must contact Shopify Support for assistance in updating your information.

If you fail to update your tax information, then your payouts might be paused and further restrictions may take place until your information can be verified.

Reporting your tax with an EIN or SSN

If you set up Shopify Payments with your business type set to Individual, then Shopify reports your income to the IRS under your personal name and SSN.

If you set up Shopify Payments with your business type set to Sole Proprietor or Single Member LLC, then Shopify reports your income to the IRS under your personal name and SSN. If the income should be reported under your business name and EIN, then you can reach out to Shopify Support.

If you set up Shopify Payments with any other business type, then Shopify reports your income to the IRS under your business name and EIN.

Learn more about setting up Shopify Payments.

Handling incorrect information on your Form 1099-K

If you've previously updated your Tax ID or business name information, then it can take up to 5 business days for updates to display on the form.

If you haven't previously updated your Tax ID, then check your email on file with Shopify for ‘Correct your TIN’ or ‘1099-K’ for a notification and steps to update your details.

If you haven't previously updated your Tax ID and you haven't received an email, then contact Shopify Support.

Receiving a Form 1099-k without meeting the threshold

1099-K reporting is performed at the tax identification number (TIN) level, and uses information such as your SSN or EIN. If you have two or more accounts with the same TIN, then the reporting volume will be combined to determine if a Form 1099-K is made available. In this situation, a Form 1099-K will be available in each account for that store’s reporting volume if the combined reporting volume is greater than that year’s threshold.

You might qualify to receive a Form 1099-K if you meet your state’s filing thresholds. Filing thresholds for some states might differ from federal requirements. Please check your state’s government website for more details.

Downloading your Form 1099-K and transaction information

If you're the store owner, then you can download your Form 1099-K and a CSV file of the transactions that are accounted for in the document.

Download your Form 1099-K

You can download your Form 1099-K from your Shopify admin.

Desktop

From your Shopify admin, go to Finance.
Click Documents.
Select 1099-K.
Click the 1099-K form you want to download.

iPhone

From the Shopify app, tap the … button.
Tap Finance.
In the Finance section, tap …
In the Documents menu, tap 1099-K.
In the 1099-K forms section, tap the tax form you want to download.

Android

From the Shopify app, tap the ☰ button.
Tap Finance.
In the Finance section, tap …
In the Documents menu, tap 1099-K.
In the 1099-K forms section, tap the tax form you want to download.

Download your 1099-K transactions

If you need to refer to a list of transactions that will be accounted for in your 1099-K form, then store owners can download them in CSV format.