How will using WePay affect my taxes?

WePay 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 certain payment transactions. 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 WePay send me the form?

If you collect at least $600 in the calendar year, WePay 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. WePay is also required to file a corresponding tax form with the IRS, which participates in a combined filing program with many state tax agencies.

Please note that prior to 2023, 1099-K forms were only issued if you collected $20,000 and had at least 200 transactions in the calendar year.

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.

Are refunds and fees included in the $600?

When determining whether you have received more than $600, WePay does not deduct refunds, chargebacks or fees. According to IRS regulations, 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?

WePay will report the gross amount of payment transactions processed.  It is up to you (and a tax professional) to determine whether your proceeds represent taxable income.   

I am not a US citizen or a permanent resident. Will I get the 1099-K form from WePay?

If you are subject to tax in the United States, and you meet the requirements of at least $600 collected in a calendar year you will receive the Form 1099-K.

If you reside in Canada and are not subject to tax in the United States but process funds in US dollars or deposit into a US bank account, you will need to submit a Form W-8-BEN-E to WePay in order to be excluded from IRS reporting.

If you reside in Canada but do not process funds in US dollars or deposit into a US bank account, you will not receive a Form 1099-K.

 

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