Got a 1099-K from PayPal or Stripe? What it means, the 2026 threshold, and fixing wrong amounts

What a 1099-K is, and the threshold for 2025 and 2026

Form 1099-K is filed by payment apps, online marketplaces and card processors to report payments you received for selling goods or providing services during the year. A copy goes to the IRS and a copy to you. The IRS Taxpayer Advocate Service says you should get it by January 31 of the following year, and both PayPal and Stripe say their forms are available around January 31.

The threshold is where most of the confusion comes from, because it has changed several times and old numbers are still all over the internet. In its October 23, 2025 release, 'IRS issues FAQs on Form 1099-K threshold under the One, Big, Beautiful Bill; dollar limit reverts to $20,000', the IRS says the law retroactively reinstated the threshold that applied before the American Rescue Plan Act of 2021. The IRS's Form 1099-K FAQs note that the $600 rule it replaced applied regardless of the number of transactions.

• The federal rule for payment apps and marketplaces: a form is required only when payments exceed $20,000 AND the number of transactions exceeds 200 in the calendar year. Both must be true.
• 2025: Stripe's help center states the $20,000 and 200 test for 2025 onward, and PayPal's 'Current Form 1099-K Reporting Thresholds 2025 Update' gives the same figures.
• 2026: IRS Publication 1099 (2026) lists the same two conditions: over $20,000 in total payments and over 200 transactions.
• Card payments are different. The IRS says there is no threshold for payment card transactions processed by a merchant acquirer, so a card processor can report any amount.
• Your state may be lower. The IRS says a state threshold can trigger a 1099-K even when the federal one isn't met. PayPal's help lists $600 for Vermont, Massachusetts, Virginia and Maryland, and over $1,000 with four or more transactions for Illinois.
• A platform may still send one below the threshold. The IRS FAQs say so, and PayPal says it issues a form to anyone who was subject to backup withholding during the year, whatever their total.

Why the number is bigger than what you earned

The 1099-K reports gross payments. The IRS Form 1099-K instructions define the box 1a gross amount as the total without any adjustment for credits, discounts, fees or refunded amounts. Stripe's help center says its reported gross volume includes fees, shipping, taxes, refunded charges and adjustments. PayPal says it reports the gross amount without subtracting fees, refunds, shipping or other adjustments.

So if you sold $15,000 of products, refunded $1,200 and paid $600 in processing fees, the form still says $15,000. That is expected, not an error. The IRS 'What to do with Form 1099-K' page says fees, credits, refunds, shipping, cash equivalents and discounts are not taxable income, so you subtract them from the gross amount on your return after checking your records. The cost of the goods you sold is not on the form either; as a business seller you deduct it when you work out your profit.

If it includes personal payments from friends and family

Money from friends and family as gifts or for shared expenses should not be on a Form 1099-K, and the IRS says those payments aren't taxable income. They usually end up on the form because the sender picked the business option when they paid you.

PayPal's help is direct about this: it must include any payment the sender marked as being for goods or services, and a 'Goods and Services' payment cannot be changed to 'Friends and Family' after it is processed. So the fix happens in two places.

• Ask the issuer for a corrected form. On PayPal in a web browser: click 'Settings' next to 'Log out', click 'Statements and Taxes', choose the year under 'Tax Documents', then click 'Need to change your 1099-K?' in the 1099-K box and follow the steps.
• Ask PayPal for its Reconciliation Report, which lists the transactions included in your gross sales, so you can point to the exact personal payments.
• If the issuer won't correct it, report it on your return instead (see below). The IRS's FAQ example is a roommate's rent reimbursement entered as 'Form 1099-K received in error' so it nets to zero.
• Going forward, ask friends to send personal money as personal payments, and note who sent each one and why. The Taxpayer Advocate Service recommends exactly that record.

If the form is wrong, a duplicate, or not yours

Contact the filer, not the IRS. The IRS's page says: 'Don't contact the IRS. We can't correct your Form 1099-K.' The filer's name and contact details are in the top left corner of the form. If you don't recognize the filer, contact the payment settlement entity listed in the bottom left corner, above your account number. If the form isn't yours at all, or is a duplicate, ask for a corrected form showing a zero amount.

Stripe works differently for totals. Its help center says Stripe must report total gross volume and cannot update the amounts on 1099 forms. What you can fix is your tax details, such as name or TIN, in the 'Documents' section of the Stripe Dashboard, and account admins can export a transaction log to audit the figure. If you sell through a platform that set up your Stripe account for you (a Stripe Express account), Stripe says the platform files your form and is the one to contact if it hasn't appeared after January 31.

Whatever you do, keep a copy of the original form, any corrected form, and every email or message with the issuer.

How to report it on your return

Don't wait for a corrected form before you file. The IRS says that if you can't get one, you should still file on time and report the amount from the incorrect form in the entry space at the top of Schedule 1 (Form 1040).

For the rest, it depends on what the payments were:

• Selling products or services as a business, side hustle or creator: report the income on Schedule C (Form 1040), where you also deduct refunds, fees, the cost of goods and other business expenses. The Taxpayer Advocate Service says net self-employment income over $400 also means filing Schedule SE.
• Personal items you sold at a loss, like a used phone: the loss isn't deductible, but you don't pay tax on the reported amount. The IRS says to report it at the top of Schedule 1, or report the loss on Form 8949, which carries to Schedule D.
• Personal items sold at a gain: report the gain on Form 8949 and Schedule D.
• Payments that were never yours to report, like gifts or reimbursements: get them corrected, or report them as received in error so they net to zero.
• Backup withholding in box 4: the IRS says to report that federal income tax withheld on your return, which may give you a refund or credit.

Keep records so next year is easier

The IRS's general rule is to keep the records that support income or deductions on a return until the period of limitations for that return expires, which in the standard case is 3 years. For an online seller, that means a small set of habits, not a filing cabinet.

• Keep business and personal money in separate accounts, so friends and family payments never mix with sales.
• Download each platform's yearly transaction report or reconciliation report in January, next to the 1099-K.
• Record refunds, chargebacks and fees as they happen, so the gap between gross and net is already explained.
• Keep receipts for what you buy to sell, and for business expenses.
• Check your tax details (legal name and TIN) on each platform before the year ends, so the form arrives correct and backup withholding doesn't start.
• Remember the rule the IRS repeats on every 1099-K page: whether or not you receive a form, you must report your income.

Keep every sale in one place

Part of the January scramble is that sales are scattered across apps and DMs. On OneSol you can sell from a free link-in-bio page, and on Pro ($9/month) payments go straight into your own Stripe or PayPal account, so your sales sit in one account with its own reports. OneSol does not file taxes or give tax advice.

This is general information, not tax or legal advice, and your situation may differ. Check irs.gov or speak to an accountant before you file.