Sellers have a lot on their plates already, so the IRS Form 1099-K is one more tax-related headache with which they must deal. In addition to the Federal requirement, some states have initiated their own rules for payment processors about generating 1099-K forms going to online sellers.
Today we came across the only breakdown we’d seen of 1099-K thresholds by state – on the Walmart seller blog.
The IRS threshold for 2021 for Form 1099-K was at least 200 transactions and $20,000 in payments processed (this drops to $600 for tax year 2022), but Walmart also shows details for 8 states that require lower thresholds (“state override,” Walmart calls it).
Back in 2018, we reported on Vermont and Massachusetts thresholds ($600), but since then, 6 other states joined them in setting their own requirements, according to the table on the Walmart post.
About midway down the page, there’s a section called “1099-K reporting” where you can find the table and more information, including a timeline and eligibility requirements.
Naturally sellers should check their own individual state laws and consult an accountant if they have questions.
As we recently reported, some sellers in California reported eBay had prepared 1099-Ks for their account even though they hadn’t reached the threshold. Interestingly, California is not listed on the Walmart table.