Tax Form 1099: Report of Payments

What is Form 1099?

The 1099 form is used to report non-employment income to the Internal Revenue Service (IRS). Businesses are required to issue a 1099 form to a taxpayer who has received at least $600 or more in non-employment income during the calendar year. For example, a taxpayer might receive a 1099 form if they received interest or dividends.

Because there are many types of income, there are a variety of 1099 forms. Examples of the types of income that is reported in a 1099 form include: interest income, local tax refunds, and retirement account payouts. The responsibility is on the taxpayers to report all of their income when they file their taxes, even if they did not receive 1099 forms for all their items of income.

Taxpayers also do not need to send their 1099 forms to the IRS when filing but should report any errors on their 1099s.\

Who Needs to Receive a 1099 Form?

Usually, anyone who was paid $600 or more in non-employment income should receive a 1099. However, there are many types of 1099s for different situations. Also, there are many exceptions to the $600 rule, meaning you may receive a 1099 even if you were paid less than $600 in non-employment income during the tax year.

Do I Need a 1099 Form to File Taxes?

Taxpayers must report any income even if they didn't receive their 1099 form. However, taxpayers don't need to send the 1099 form to the IRS when they file their taxes. In other words, the IRS receives the 1099, containing the taxpayer's Social Security number, from the issuer or payer.

What Is the Difference Between a 1099 and a W2?

A 1099 form shows non-employment income, such as income earned by freelancers and independent contractors. On the other hand, a W-2 shows the annual wages or employment income that a taxpayer earned from a particular employer during the tax year. Unlike a 1099, a W-2 shows the taxes withheld by the employer from the employee's salary throughout the year.

Form 1099-K is a report of payments received during a tax year from:

• Credit, debit, or gift cards (payment cards)
• Payment apps or online marketplaces (third-party payment networks)

Effective for calendar years starting on January 1, 2022 and beyond, the American Rescue Plan Act of 2021 (the Act) had significantly lowered the reporting threshold associated with Form 1099-K. Payment Card and Third Party Network Transactions, from $20,000 in aggregate payments and 200 transactions to solely a threshold of $600 in aggregate payments (with no minimum transaction requirement). However, in response to criticisms on the increased administrative and compliance burden, the Internal Revenue Service (IRS) has delayed the implementation of this threshold for Form 1099-K reporting for the 2022 and 2023 calendar years. In its most recent announcement in late November 2023, the IRS announced the delay of the new $600 threshold requirement for Form 1099-K reporting and is planning a threshold of $5,000 for 2024 to phase in the new law under the American Rescue Plan.

Therefore, for 2023 calendar year, like prior years, Form 1099-K will only be issued for taxpayers who received over $20,000 and have over 200 transactions.

Use Form 1099-K with other tax records to help figure and report your taxable income when you file your taxes. However, because Form 1099-K is required to include all payments received, whether the payment may or may not be taxable income, we advise you to consult a tax professional to understand whether a payment reported in a Form 1099-K needs to be reported as taxable income in your tax return.

Frequently Asked Questions

1. I pay vendors through BILL; do I have a 1099 filing obligation?

Generally, per IRS requirements, certain payments to contractors or vendors may require 1099-MISC or 1099-NEC tax reporting to the IRS. BILL doesn't give tax advice; we recommend that you consult with your tax advisor on your 1099 obligations.

2. Why am I receiving Form 1099 for calendar 2023 from BILL for the first time?

If you received Form 1099-K from BILL, it means you received payments of over $20,000 and have over 200 transactions processed by BILL in 2023. Please review your 1099-K forms with your tax advisor to determine what portion of the reported payments is taxable income to you.

3. What is Form 1099-K?

Form 1099-K is an IRS informational tax form that reports the gross amount of reportable transactions for the calendar year to the IRS. If you meet the threshold in a given calendar year, you'll receive Form 1099-K. BILL is also required to file Form 1099-K with the IRS so there's no need for you to submit your Form 1099-K with your tax return. You are, however, required to report all your taxable income, whether or not you have received a form 1099, to the IRS by the tax return due date. Please visit the IRS website at IRS instructions for additional information.

4. When will Form 1099-K be sent to me?

If your transactions meet the threshold for reporting, you'll receive your Form 1099-K for 2023 payments you received by February 28, 2024.

5. Who do I contact if I don't receive my Form 1099-K by February 28, 2024?

Please reach out to our customer support by visiting the BILL help center at help.bill.com and selecting the BILL Virtual assistant if you believe that you should have received a 1099-K.

6.What do I do if I need to correct my 1099-K? Will I receive a corrected Form 1099-K?

Please reach out to our customer support by visiting the BILL help center at help.bill.com and selecting the BILL Virtual assistant if the Employer identification number, individual Tax ID number, or social security number shown on Form 1099-K is incorrect. Please provide a copy of a signed Form W-9 with your correct EIN, TIN or SSN for support.

You don't need to contact us if you believe the amount of payments on your Form 1099-K isn't taxable income. Instead, please consult with your tax return preparer or tax advisor on how to reflect the correct information on your tax return.

7. If I have multiple BILL accounts, will I receive multiple 1099-K forms?

No - if your multiple BILL accounts have the same Employer identification number, individual Tax ID number, or social security number. Your year-to-date gross payment amount will be consolidated for all of your BILL accounts into one Form 1099-K.