1099-K Tax Forms and Tax Season Overview [US Sellers]

[Helen]

We want to make sure you are prepared for tax season in the US and that you have everything you need from Square to file your return. Let’s get started. 

This post was updated in January 2024.

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Note: In March 2021, Congress modified the requirements for reporting transactions by lowering the minimum reporting threshold. However, the IRS has delayed the implementation of the Form 1099-K lower threshold for 2023 transactions. To learn more, visit the IRS website.

Understanding Form 1099-K

 

What is a Form 1099-K?

The IRS requires Payment Settlement Entities (PSEs), such as Square, to report the payment volume received by U.S. account holders. A Form 1099-K is the information return that is given to the IRS for qualifying customers.

Read this IRS fact sheet for more frequently asked questions about Form 1099-K. 

Do I qualify for a Form 1099-K?

Square will provide a Form 1099-K for you if you meet the criteria in the table below. 

Tax Year	Year Form Available	Federal Reporting Threshold
2023	2024	More than $20,000 gross sales from goods or services AND more than 200 transactions in the calendar year.

How do I download my Form 1099-K?

If you qualify for a Form 1099-K you'll see a link to download your Form 1099-K on the Tax Forms tab of your Square Dashboard:

1. Sign in to your online Square Dashboard.
2. Navigate to Settings > select Account & Settings. 
3. Click Business information > then click Tax forms.

Forms will be available by January 31st, 2024.

Where can I view my fees?

Learn how to view your fees from your online Square Dashboard. 

If you don't qualify for a Form 1099-K, you can calculate your year-end sales report (including fee information) from the Sales Summary tab of your Square Dashboard. Your tax professional may need this information to complete your tax forms. 

Form 1099-K and Tax Season FAQs

When will my Form 1099-K be available?

Forms will be available to download from your Square Dashboard by January 31st, 2024.

What if I have multiple Square accounts?

Our reporting threshold is based on the aggregate gross sales volume processed on all accounts that use the same EIN or SSN. If you have multiple accounts that use the same SSN or EIN, we will aggregate volume for all accounts and issue a 1099-K if you meet the threshold.

How do I update my tax reporting information or add an EIN to my account?

You can review and update your taxpayer information (legal name and EIN) from your online Square Dashboard — sign in from a web browser at squareup.com/login. Learn how to update your Form 1099-K for a prior year.

How do I get an EIN? 

An Employer Identification Number (EIN) is a federal tax identification number used by the IRS to identify your business for tax purposes. You can apply for an EIN online on irs.gov. Learn more about how to get an EIN.

What is a TIN? 

A taxpayer identification number is an identification number used by the IRS for tax purposes. A TIN is typically an SSN (for individuals) or it can be an EIN (for businesses). Visit Square’s Support Center for the steps to update your taxpayer identification number. 

Corrected forms: Can I receive a blank/0 1099-K form?

Square cannot issue a Form 1099-K with a zero dollar amount. A corrected form can be used to inform the IRS that the amount originally reported under the previous TIN should be updated and associated with the new TIN. Square will file the corrected form with the IRS during our next filing cycle, which occurs 3-4 times a year. Contact the IRS to work directly with them to ensure the businesses’ sales are not reported under the previous TIN.

What is ‘Block, Inc.’? 

In 2021 Square announced it was changing its name to Block. Your Form 1099-K will list ‘Block, Inc. f/k/a Square, Inc.’ as the FILER. The name ‘Block, Inc.’ will also appear under the PSE’s (Payment Settlement Entity) name and telephone number.

Are cash sales included in the reporting threshold?

Cash sales are not included in the total we report on the Form 1099-K.

I use the Cash App for my business, will I receive a 1099-K?

If you have the Cash App for Business and meet the reporting threshold you will receive a 1099-K. To learn more about Cash for Business tax reporting and the Form 1099-K read: Tax Reporting with Cash For Business. 

Additional Resources

• Square Tax Reporting and Form 1099-K Overview - Square Support Center
• Form 1099-K Tax Reporting Information - Square Support Center
• Update Form 1099-K - Square Support Center
• Understanding Your Form 1099-K - IRS Website

Photo by freestocks on Unsplash.

Disclaimer: This article is for information purposes and does not constitute legal, financial, or tax advice. We are not tax professionals. For specific advice applicable to your business, please contact a tax professional. This post was updated in January 2024.

[AshleyK]

@bridgettay you won't be able to delete a business, location, or account from Square. If you want to edit and/or set up your taxes under "set up taxes" then you will need to go to Items > Sales Taxes on the Square Dashboard. 

If you need to edit your 1099-k taxes, please go to Account & Settings on your Square Dashboard. 

[RWs_Photos]

Hi - I'm going to reply to this older thread like some other have done.  I have an issue with Square and a 1099-K that I received for 2022. I'm in Massachusetts which has a low threshold of $600 in sales that requires reporting.  I only had $584.00 in sales for 2022, but Square is adding in the $30.94 in state sales tax as revenue to me and considering me as having more than $600 in sales.  I feel that this is incorrect and I've got an ongoing discussion with support about it.  It is revenue, but for the state, not myself.  I feel that I shouldn't have gotten a 1099-K.

Is there something I should have set up differently so that Square doesn't consider sales tax as income to me?  This is seriously making me reconsider using Square to accept credit cards for this upcoming craft fair season if they are going to consider sales tax as income to the vendor and not the state.

Thanks,

Rob

[_Violet]

Hi @RWs_Photos - I see this is your first post in the Seller Community so I'd like to officially welcome you! 🎉👏

In the State of Massachusetts, Square is required to issue a Form 1099-K and report to the state when $600 or more is processed in card payments. Square may report, solely within its discretion, on amounts below these thresholds to meet state and other reporting requirements.

We’re required to calculate the gross amount processed through each Square account to determine qualification for a Form 1099-K. According to the IRS, gross income is defined as all facets of income an individual has received throughout the calendar year. For more information on what’s included in the gross processing volume, please visit the IRS website. 

[Bobby1146]

I didn't qualify for a 1099, where can I get a tax ID number for what I did make?

[_Violet]

Hi @Bobby1146 - Thanks for reaching out to us here on the Square Seller Community👋

I went ahead and merged your post to an existing thread where other Square Sellers have discussed 1099-K questions. We merge duplicate conversations together to keep like comments in one place, and to make it easier for others to find the thread in the future. 

Whether or not you qualify for a Form 1099-K, your yearly payment details can be found in Reports from your Square Dashboard. Select Last Year in the date selector, then choose to view the Sales Summary, Payment Methods, and Taxes sections.

I hope this information is helpful but please do let me know if you have any additional questions 🙂

[Highdecors]

When you qualify for a 1099-K form does it get filled with my personal tax returns or does it get filed on it own and do i put my business location in for taxpayer info or my own personal address

[_Violet]

Hi there, @Highdecors 👋 Thanks for reaching out to the Seller Community with your inquiry. 

I've merged your post to an existing thread on our 1099-K forms where other Sellers have asked questions as well. We merge duplicate conversations together to keep like comments in one place, and to make it easier for others to find the thread in the future. 

By default, your 1099-K will be filed under the SSN you used when you created your Square account unless you also provided an EIN. You can review and update your taxpayer information (legal name and EIN) from your online Square Dashboard. If you still need to update from an SSN to an EIN, you can do so on the same page.

I hope this information is helpful but please do let me know if you have any additional questions 🙂

[lashesbysandey]

Question for the Square Tax Team
My business went from a sole proprietor to sole member LLC on January 1st 2024. If I change my EIN will that cause my “1099K” for prior year-2023 to update by default within the square account? Or should I wait till after January 31st to update my EIN or should I just open a new account with the new LLC? 

[TheRealChipA]

Hi @lashesbysandey.  Square’s help documents have the following statement in them:

“If you ever need to update your EIN due to a typo or change in corporation type, please contact us  and we can take care of this on your behalf.”

To me, this implies that when you call and initiate the change you should be able to get the information you are looking for at that time.  Most likely, the change would take effect for all future sales, since Square has a pretty firm policy of never changing the past once a transaction is closed.  But the support folks should be able to help you get this done.

Regards,

[Stacelyn24]

It's tax time again...lol 🙂  Thanks for the information and for keeping up to date.  Yep we're all ready.

[Rlmokerski]

I’m confused because Square is telling me I didn’t qualify for the 1099K but I clearly do I meet all the qualifications

[Lou8]

Hi @Rlmokerski, thanks for flagging.

The criteria for the 1099-K are outlined in our Support Center article.

If you believe that you qualify for the 1099-K but didn't get the 2023 form on your Dashboard, you can reach out to our Support Team. A member of our team will be able to look into this for you.

[chiot77777]

Been using square over 10 years. All of sudden, all transactions for 2023 are missing on my square desktop. I use the POS app to run payments.

How do I get the POS transactions to sync to the desktop? Trying to do my taxes. POS cannot access last year. Desktop doesn't seem to know I exist. 

[Kingestate]

We operate an Estate Sale business and after each sale, we give 70 percent of our amount to our clients. How do we reflect on our 2023 taxes our proper amount of adjusted income? We had expenses and also this dollar amount submitted to our client. 

[dandemayo]

Hi,

Hoping someone has an answer to this question. I know the 1099-k amount includes square fees, but I’m having trouble figuring out if that amount also includes the state sales tax collected during each transaction, or if that isn’t factored in.

[DammiAdservices]

The 1099-K form provided by Square includes the gross amount of all reportable payment transactions. This means it reflects the total sales processed through Square, including both the sales amount and any applicable taxes collected during those transactions. Therefore, the amount reported on your 1099-K should include the state sales tax collected during each transaction, along with any fees charged by Square. It's important to note that you should consult with a tax professional or accountant for personalized advice regarding your specific tax situation and how to accurately report your income and expenses.

[dandemayo]

Thank you! Follow up question. So I’d imagine the same goes for invoices that were paid via “other” method (in this case by check) 

[DammiAdservices]

However, it's important to note that the 1099-K form only reflects payments processed through Square. If you received payments via other methods such as checks, those transactions won't be included on the 1099-K form. You'll need to separately account for those payments when reporting your income for tax purposes.

[_Violet]

Hi @dandemayo- Thanks for reaching out to us here on the Square Seller Community👋

I went ahead and merged your post to an existing thread where other Square Sellers have asked questions about the 1099-K form. We merge duplicate conversations together to keep like comments in one place, and to make it easier for others to find the thread in the future. In the original post from @Helen, you will find some additional info and resources. Please let me know if you happen to have any further questions.

And thank you to @DammiAdservices for the assistance here! 🙂