Form 1099-K (Rev. March 2024) – 2024 Tax Year
Checklist
Purpose
Form 1099-K reports aggregate gross payment card and third-party network transactions to the
Internal Revenue Service under Section 6050W of the Internal Revenue Code. For the 2024 tax year, the revision clarifies filer identification by distinguishing a payment settlement entity from an electronic payment facilitator or other third party.
The update also clarifies which contact information you must report when the filer and the payment settlement entity differ. Backup withholding reporting is reinforced in the 2024 instructions for payees who neglect to provide a taxpayer identification number in the appropriate manner.
Preparation Steps
Use this Form 1099-K 2024 checklist to gather the tax information you need before you complete 1099 forms for the calendar year. Many reporting errors start with an incorrect filer type, an invalid taxpayer identification number, or an inaccurate gross amount total.
A complete review of Box 1a, Box 1b, Box 2, Box 3, Box 4, and the monthly boxes supports consistent information reporting. Careful organization also helps you align reportable payment transactions with third-party network transactions when your reporting duties arise through a third-party settlement organization.
Step 1: Identify Filer Type and Check Appropriate Box (2024 Requirement)
Determine whether the entity with the filing requirement is a payment settlement entity, an electronic payment facilitator, or another third party. Mark the corresponding "filer" checkbox on
Form 1099-K to reflect the correct payer role. Use the same determination throughout your annual tax forms process to maintain consistent reporting across the tax year.
Step 2: Obtain Payee's Correct TIN and Verify Against Form W-9
Certification
Collect a valid Taxpayer Identification Number from the payee using Form W-9, which may list a
Social Security number, an Individual Taxpayer Identification Number, or an Employer
Identification Number. Confirm that the name and TIN combination aligns with the payee’s certification on the W-9 form. Use the IRS TIN Matching System when available to validate combinations and reduce errors in your tax return reporting records.
Step 3: Determine Reportable Transaction Threshold
Identify whether you report payment card transactions, third-party network transactions, or both, because threshold rules can differ by reporting channel. For third-party network transactions reported by a TPSO, apply the de minimis threshold that requires reporting only when the gross amount exceeds $600 for the calendar year, regardless of the number of transactions. Track gross receipts by participating payee so you can evaluate the threshold accurately at year-end.
Step 4: Separate Card-Not-Present From Card-Present Transactions
Calculate the aggregate gross amount of card-not-present transactions for Box 1b, which generally covers online, phone, or catalogue sales where the card was not present, or the card number was keyed into the terminal. Distinguish these amounts from card-present payment card transaction activity during the same calendar year. Maintain consistent tagging in your transaction records so the Box 1b total matches your underlying payment types.
Step 5: Assign Merchant Category Code in Box 2
Enter the four-digit merchant category code that the payment card industry uses to classify the payee for the payment card transactions reported on Form 1099-K. If you use a different industry classification system, assign the merchant category code that most closely corresponds to the payee’s trade or business activity. If you are a TPSO or you do not use an industry classification system for payees, do not complete Box 2.
Step 6: Count All Non-Refund Transactions for Box 3
Enter the number of payment transactions processed through the payment card or third-party payment network, and exclude refund transactions from the count. Verify that your count reflects the full reporting period for the calendar year. Reconcile the Box 3 volume with your source records so transaction counts support the gross amount totals you report elsewhere.
Step 7: Calculate Gross Amount Without Adjustments for Box 1a
Enter in Box 1a the gross amount of the total reportable payment card and third-party network transactions for the calendar year. Define gross amount as the total dollar amount of total reportable payment transactions without adjustments for credits, cash equivalents, discount amounts, fees, refunded amounts, shipping amounts, or any other amounts. Determine the dollar amount of each transaction based on the date of the transaction, and preserve that date for audit-ready tax information.
Step 8: Report Monthly Breakdown in Boxes 5a–5l
Enter the gross amount of the total reportable payment transactions for each month of the calendar year in the appropriate monthly box. Confirm that you use all 12 monthly boxes and that each month aligns with your internal reporting periods. Add the monthly totals and compare the result to Box 1a so the annual gross amount reconciles to the monthly detail.
Step 9: Complete Backup Withholding Amount in Box 4
Enter backup withholding in Box 4 when the payee is subject to backup withholding, including cases where the payee has not furnished a Taxpayer Identification Number in the manner required. Ensure you record withheld amounts contemporaneously so you can report the total accurately at year-end. Keep backup withholding documentation with the payee’s W-9 form records because Box 4 connects directly to TIN certification compliance.
Step 10: Populate PSE Name and Telephone for Payment Settlement Entity
Identification
Enter the name, address, and telephone number of the entity with the filing requirement in the filer area of Form 1099-K. When the entity with the filing requirement is an electronic payment facilitator or other third party, enter the payment settlement entity’s name and telephone number in the box above the account number box at the bottom left of the form. Confirm the contact information reflects the correct reporting party so the IRS can route filing questions to the appropriate organization.
Step 11: Report State Income Tax Withheld in Boxes 6–8
Use Boxes 6–8 when you participate in the Combined Federal/State Filing Program or when a state requires you to file paper copies with a state tax department. Enter the state abbreviation in Box 6, the filer’s state identification number in Box 7, and any state income tax withheld in
Box 8. When the state does not require these entries for your filing method, you may leave these boxes blank for the IRS copy.
- The selection of the electronic payment facilitator filer checkbox requires you to confirm
- Full IRS transcript retrieval (Wage & Income + Account)
- Professional tax form review
- Preparation & filing support
- Tax relief options if you owe the IRS
Step 12: Assemble and File Copy A With Form 1096 and Provide Copies to
the Payee
If you file on paper, submit the scannable Copy A with the IRS by the required filing deadline and include Form 1096 as the annual transmittal. Provide Copy B to the payee for records, provide Copy 2 to the payee for use in filing the payee’s state income tax return, and provide
Copy 1 to a state tax department when a state requires a paper copy. Organize distribution so the payee receives the same gross amount and backup withholding figures that you report in
Box 1a and Box 4.
2024 Year-Specific Updates
For the 2024 tax year, Form 1099-K introduces filer checkboxes that identify whether the entity with the filing requirement operates as a payment settlement entity, an electronic payment facilitator, or another third party. Updated instructions also establish a specific placement rule for reporting the payment settlement entity’s name and telephone number when an electronic payment facilitator or another third party acts as the filer.
Greater emphasis appears in the 2024 revision on backup withholding, with clarification that Box
4 applies when a payee fails to furnish a Taxpayer Identification Number in the manner required.
Additional clarification explains that Box 1b captures card-not-present activity when the card was not present at the time of the transaction or when the card number was keyed into the terminal. the correct filer type and report the payment settlement entity contact information when the filer differs from the payment settlement entity.
If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.
