IRS Form 1099 K Boxes Information 2021

1099 K Online Form is used to report payments made to contractors online using payment cards or third-party networks to the IRS annually. Businesses may be confused when reporting the payments in the respective boxes of the tax form. Here are the boxes on IRS 1099 K Form

Box 1a – Gross Payment Card/Third Party Transactions

Enter the total amount of reportable payment card/third party transactions made in a calendar year in “Box 1a”. The total dollar amount reported for each participating payee regardless of any adjustments for credits, cash equivalents, discount amounts, fees, refunded amounts, or any other amounts is considered as “Gross amount”.

Box 1b – Card Not Present Transactions

Enter the total amount of reportable payment card/third-party network transactions made in a tax year in which the card was not present. This may be due to the card number being keyed into the terminal. Typically, this happens mostly for online sales, phone sales, or catalog sales.

Box 2. Merchant Category Code

Enter the merchant category code (MCC) used by the payment card business owner to classify the payee. Make sure to enter the 4-digit MCC accurately.

For example: if you or another entity filing uses an industry classification system other than, or in addition to, MCCs, assign to each payee an MCC that most closely corresponds to the description of the payee’s business.

Box 3. Number of Payment Card Transactions Held

Enter the number of payment card transactions (not including refund transactions) processed throughout the tax year in “box 3”.

Box 4. Federal Income Tax Withheld

Enter the withholding of taxes in a calendar year under backup withholding rules. Backup withholding generally occurs when the individual has not furnished their TIN to the taxpayer/

Boxes 5a through 5l

Enter the amount of the total reportable payment transactions for each month of the calendar year in boxes 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5h, and 5i respectively.

Boxes 6-8 – State Information

Use these boxes when the taxes withheld exceed state income tax. Box 6 enters the abbreviated state name. Box 7 enters the filer’s state TIN. If you withheld state income tax on this payment, you may enter the amount withheld in box 8.

File 1099 K Form Online

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