Using Chase Integrated Payments does not necessarily affect your taxes. Chase Integrated Payments helps you organize your payments and under certain circumstances will issue you Form 1099-K, a requirement from the IRS.
What is Form 1099-K and what does it contain?
Form 1099-K is the IRS’s information return for reporting the movement of funds. It reflects the gross dollar amount that you collected in the previous calendar year. In addition, the IRS 1099-K form should reflect your legal name and Taxpayer Identification Number (TIN). It is up to you (and your tax professional) to determine whether these amounts represent taxable income.
When will Chase Integrated Payments send me the form?
If you collect at least $20,000 and have at least 200 transactions in the calendar year, Chase Integrated Payments will send you the 1099-K form by January 31 of the following year. All payment processors are required to issue the 1099-K form by law. Chase Integrated Payments is also required to file a corresponding tax form with the IRS, which participates in a combined filing program with many state tax agencies.
I received only gifts and donations. Will I receive a Form 1099-K?
As of 2015, the IRS has clarified that Chase Integrated Payments is not required to send a Form 1099-K with respect to payments that are made solely as gifts or donations. The purpose of Form 1099-K is to report payments for the provision of goods or services, which may be subject to tax. Gifts and donations typically are not reported as income by recipients, so it is not necessary to send them a Form 1099-K.
We are a business or non-profit. Do these thresholds apply to us as well?
Yes, these thresholds apply to all US-based businesses including non-profits and other tax-exempt entities. However, the 1099-K form will be sent with the name and Taxpayer Identification Number (TIN) of your business or non-profit, rather than the Chase Integrated Payments account’s administrator’s legal name and social security number.
In other words, if you are an administrator of a Chase Integrated Payments account for a business or non-profit, you will not take on any tax liability on behalf of the business or non-profit under your own social security number, as long as you input the correct name and employer identification number for the business or nonprofit into Chase Integrated Payments
Are refunds and fees included in the $20,000?
When determining whether you have received more than $20,000, Chase Integrated Payments does not deduct refunds or fees. Gross payment volume is determined by the amount of money your customers originally paid.
How should I use the information from the 1099-K form?
It is up to you (and a tax professional) to determine whether your proceeds represent taxable income. Chase Integrated Payments will not report the funds that you collected as earned income. The 1099-K form is simply intended to track the movement of funds.
I am not a US citizen or a permanent resident. Will I get the 1099-K form from Chase Integrated Payments?
If you are subject to tax in the United States, and you meet the requirements of at least $20,000 collected and at least 200 transactions in a calendar year you will receive the 1099-K form. If you reside in Canada or another foreign country and are not subject to tax in the United States, you will not receive the 1099-K form.