Why Am I Receiving a 1099-K Form From Dwolla?

What is a 1099-K tax form?

A 1099-K tax form reports payments that have been processed through a third-party payment network (like Paynote). These forms are issued by payment processors to report payment activity that moved through their network.

This form is not the same as a 1099-MISC or a 1099-NEC, which officials commonly receive from officiating organizations. These tax forms are completely different and may reflect the same earnings across multiple tax forms.

 

Why did I receive a 1099-K?

Paynote uses a third-party payment processor to facilitate ACH bank transfers. As a payment network provider, this processor is subject to federal and state reporting requirements and may be required to issue Form 1099-K for eligible accounts.

Who receives a 1099-K tax form?

To receive a 1099-K tax form, you must have received payments via Paynote and meet the applicable reporting threshold.

Reporting thresholds may vary by year and by state, so the amount required to trigger reporting depends on the current IRS guidelines and your state’s requirements.

 

I already received a 1099 — why am I getting another one?

A 1099-K tax form is not the same as a 1099-MISC or a 1099-NEC. These tax forms are completely different and may reflect the same earnings in multiple reports.

If you earned enough money, both:

• your officiating organization, and

• the payment processor that handled the transactions

may be required to send you tax forms regarding those same funds.

A 1099-K does not replace your officiating organization's requirements to send you a 1099-MISC, 1099-NEC, or W-2.

Both the federal and state Form 1099-K are informational returns, and the gross payments reported do not necessarily represent reportable income. The form should be used in conjunction with other tax records (bank statements, invoices, etc.) to report taxable income if any. Please consult your tax advisor to determine your tax reporting requirements.

What do I do with this?

Both the federal and state Form 1099-K are informational returns, and the gross payments reported on the form do not necessarily represent taxable income.

This form should be used in conjunction with other tax forms (like W-2s, 1099-MISC, and 1099-NEC forms) and tax records (bank statements, invoices, etc.) to determine taxable income. You should consult your tax advisor to determine your tax reporting requirements.

Where can I learn more?

If you want to learn more, you can refer to the IRS website, which outlines full details on the 1099-K tax form.

For more information, please refer to our Form 1099-K resources:

• Form 1099-K blog post
• What is a 1099-K and how does it impact me? 
• Form 1099-K Frequently Asked Questions