When
Do the IRS Changes Go into
Effect?
IRS 6050W covers all
transactions in the tax year
2011 and each tax year that
follows. Beginning in 2012,
qualifying merchants will
receive a 1099-K Form either
electronically or by mail.
Transactions occurring prior
to 2011 will not be affected
by this legislation.
Will
All Merchants Receive 1099s?
No. Only merchants who
receive over $20,000 in
gross payment volume AND
receive 200 or more payments
in a calendar year will
receive Form 1099-K
electronically or by mail.
How Will
I Know if IRS 6050W Impacts Me?
If a merchant meets both
thresholds by receiving over
$20,000 in gross payment
volume AND 200 or more
payments in a calendar year,
payment settlement entities
will send Form 1099-K
electronically or by mail
for the 2011 tax year.
Will I Be
Affected by the 2011 Tax Changes
if I Only Meet One of the
Thresholds?
No. A merchant has to pass
BOTH thresholds ($20,000 in
gross sales volume and 200
transactions) in 2011 to
qualify for the new
requirements. A business
receiving $10,000 in
payments per year would not
be affected by the new
requirements.
Are
non-profit organizations
affected by the new IRS Tax Law
6050W?
Non-profits are treated the
same as for-profits.
Non-profits will be required
to submit their SSN/TIN/EIN
as well. Non-profit
merchants will need to work
with their tax professional
to determine how they will
need to file their taxes
going forward, if they
aren’t already.
Are
personal payment transactions
received counted in the total
that will be reported to the
IRS?
Yes. All payments received
by an account will be used
when calculating the total
payment volume received.
How is
the $20,000 calculated? Will it
be calculated based on net or
gross transaction earnings?
The $20,000 will be
calculated by looking at a
merchant’s gross sales
volume.
Who is
the Business Contact Name?
The Business Contact Name is
the individual’s name that
was provided to the IRS when
applying for your TIN or EIN.
This is the name that should
be listed on your account
when verifying your
identity. If the name listed
on your account is not
correct, please upload or
fax your documents by
following the links on your
account.
What is a
SSN/TIN/EIN?
SSN = Social Security Number
TIN = Tax Identification
Number
EIN – Employee
Identification Number
Depending on your business
type, all three of these
numbers can be used to
verify your identity with
the IRS.
If I have
multiple accounts that, when
combined, meet the thresholds,
but individually they don’t,
will I still qualify?
Yes. All other payment
processors will report
sales and transaction
volume to the IRS by SSN/TIN/EIN.
For example, if you have
two accounts tied to the
same SSN/TIN/EIN with
the following payment
levels:
-
Account A -
$18,000 in sales and
180 transactions
-
Account B -
$2,000 in sales and
20 transactions
Your accounts will
qualify under the new
regulation.
