Instructions For Form 1099-K - Payment Card And Third Party Network Transactions - 2018
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Department of the Treasury
Internal Revenue Service
Instructions for
Form 1099-K
Payment Card and Third Party Network Transactions
Section references are to the Internal Revenue Code
A participating payee is any person, including any
unless otherwise noted.
governmental unit (and any agency or instrumentality of a
governmental unit) who accepts a payment card, or any
Future Developments
account number or other indicia associated with a
For the latest information about developments related to
payment card, as payment or accepts payment from a
Form 1099-K and its instructions, such as legislation
TPSO in settlement of a third party network transaction.
enacted after they were published, go to
A payment card is any card, including any stored-value
form1099k.
card (having prepaid value, including gift cards), issued
Reminder
according to an agreement or arrangement that provides
for all of the following.
In addition to these specific instructions, you should also
One or more issuers of the cards.
use the 2016 General Instructions for Certain Information
A network of persons unrelated to each other, and to
Returns. Those general instructions include information
about the following topics.
the issuer, who agree to accept the cards as payment.
Standards and mechanisms for settling the transactions
Who must file (nominee/middleman).
between the merchant acquiring entities and the persons
When and where to file.
who agree to accept the cards as payment.
Electronic reporting requirements.
Corrected and void returns.
A third party payment network is any agreement or
Statements to recipients.
arrangement that provides for the following.
Taxpayer identification numbers.
The establishment of accounts with a central
Backup withholding.
organization by a substantial number of providers of
Penalties.
goods or services who are unrelated to the organization
Other general topics.
and who have agreed to settle transactions for the
You can get the general instructions at
provision of the goods or services to purchasers
form1099k.
according to the terms of the agreement or arrangement.
Standards and mechanisms for settling the
Frequently asked questions. To find frequently asked
transactions.
questions (FAQs) about Form 1099-K reporting, go to
Guarantee of payment to the persons providing goods
IRS.gov and enter “new payment card reporting” in the
or services (participating payees) in settlement of
search box.
transactions with purchasers pursuant to the agreement
or arrangement.
Specific Instructions
A third party payment network does not include any
A payment settlement entity (PSE) must file Form 1099-K,
agreement or arrangement that provides for the issuance
Payment Card and Third Party Network Transactions, for
of payment cards.
payments made in settlement of reportable payment
“Unrelated” means any person who is not related to
transactions for each calendar year. A PSE makes a
another person within the meaning of section 267(b) using
payment in settlement of a reportable payment
the rules of sections 267(c) and (e)(3), and 707(b)(1).
transaction, that is, any payment card or third party
Exception for payments made outside the United
network transaction, if the PSE submits the instruction to
transfer funds to the account of the participating payee to
States by U.S. payers or middlemen to offshore
accounts after 2010. For payments under contractual
settle the reportable payment transaction.
obligations entered into after December 31, 2010, a PSE
A PSE is a domestic or foreign entity that is a merchant
that is a person as described in Regulations section
acquiring entity, that is, a bank or other organization that
1.6049-5(c)(5) as a U.S. payer or U.S. middleman is not
has the contractual obligation to make payment to
required to file Form 1099-K for payments to a
participating payees in settlement of payment card
participating payee with a foreign address as long as,
transactions; or a third party settlement organization
prior to payment, the PSE has documentation on which
(TPSO), that is, the central organization that has the
the PSE may rely to treat the payment as made to a
contractual obligation to make payments to participating
foreign person according to Regulations section
payees of third party network transactions.
1.1441-1(e)(1)(ii) (substituting “payer” for the term
“withholding agent” and without regard to the limitations to
Note. Healthcare networks, in-house accounts payable
amounts subject to withholding requirements of chapter 3
departments, and automated clearing houses do not
of the Code and its regulations).
qualify as TPSOs and do not report under section 6050W.
Nov 10, 2015
Cat. No. 54721E
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Parent category: Financial