1099-K forms in Texas

[Jdb3]

For a Square account registered in Texas, if annual gross payments are under $20,000 and fewer than 200 transactions, does Square ever issue a Form 1099-K anyway?

Square’s documentation says a 1099-K may be issued even when federal thresholds aren’t met, which is a bit ambiguous. I’m looking for confirmation from anyone who’s actually experienced this in practice.

[_Violet]

Hey @Jdb3, welcome to the Square Community!

For most US states, we’ll issue a Form 1099-K if you processed over $20,000 in credit card payments and more than 200 transactions. Square is required to issue a Form 1099-K and report to the state if your taxpayer information is associated with:

• The District of Columbia, Virginia, Maryland, Massachusetts, or Vermont and $600 or more is processed in card payments.
• Illinois and more than $1,000 in processed card payments and more than 3 processed transactions.
• Missouri and $1,200 or more in processed card payments.

1099-K forms will be available for download by January 31st. If you qualify to receive a 1099-K, you can download it from your Square Dashboard.

I hope this information answers your question, but please let me know if I can help with anything else!

[Jdb3]

Hi, thank you for the clarification — I appreciate the detailed breakdown by state.

To make sure I’m documenting Square’s policy correctly, I just want to confirm two specific scenarios for a Texas-based account (and other non-listed states).

Based on your statement that Square issues a Form 1099-K only if BOTH conditions are met (“over $20,000 in credit card payments and more than 200 transactions”), please confirm the following explicitly:

1. If a seller processes more than $20,000 in credit/debit card payments, but does NOT exceed 200 transactions, Square will NOT issue a Form 1099-K.
2. If a seller exceeds 200 transactions, but does NOT process more than $20,000 in credit/debit card payments, Square will NOT issue a Form 1099-K.

In other words, for Texas and other non-listed states, can you confirm that both thresholds must be met simultaneously for a 1099-K to be issued?

I’m not asking for tax advice — just confirmation of Square’s actual issuance policy so I can keep accurate records.

Thank you for your help.

Best regards,

@Jdb3

[_Violet]

That is correct. For any states not specifically mentioned with their individual thresholds, you must meet both requirements: process over $20,000 in credit card payments and more than 200 card transactions to receive a 1099-K form. This includes Texas.

For Sellers who do not meet the 1099-K thresholds, we direct them to refer to their Sales Summary for the year, and there will be a line item for Sales Tax.

[mitin]

Hi @Jdb3 

Hope this helps, I think its the 20K mark or 200 transactions. here is the IRS link for the federal details

https://www.irs.gov/businesses/understanding-your-form-1099-k

Reporting threshold

Third party settlement organizations (TPSOs) (payment apps and online marketplaces) are required to report payments on Form 1099-K when the total amount of payments you receive for goods or services through the platform exceeds $20,000 in more than 200 transactions. You may receive a Form 1099-K even when total payments or transactions are less than the reporting threshold. No matter the amount of reported payments, if you receive payments for selling goods or services, you must report all income on your tax return.  

Reminder: Whether or not you receive a Form 1099-K, you must still report any income on your tax return. This includes payments for any goods you sell (including personal items such as clothing or furniture sold at a gain) or services you provide.

I do want to add, I am not a tax advisor or such, so do consult your tax professional for accurate information