Form 1099-K Definitions

A Federal “TIN” or Tax Identification Number is an identification number used by the IRS in the administration of tax laws. In most cases the TIN is either a Social Security Number (SSN) or Employer Identification Number (EIN), also known as a federal tax identification number.

For purposes of complying with the new law, a merchant's "legal name" is typically the name the merchant uses to file its federal tax returns, or the legal name the merchant provided to the IRS filed on Form SS-4. This Legal Name should match what is on file with your payment processor.

A payment card generally means a credit card, debit card, transit card, governmentally-issued electronic benefit transaction (EBT) card, or any other card which is accepted as payment by a network of persons unrelated to the issuer of the card and to the other merchants who accept the card as payment.

Under proposed regulations, "gross amount" is defined as the total dollar amount of aggregated transactions in which a payment card is accepted as payment for each merchant without regard to any adjustments for credits, cash equivalents, discount amounts, fees, refunded amounts, or any other amounts.

A "merchant acquiring entity" is defined as the bank or other organization contractually obligated to make payment to merchants in settlement of payment card transactions.

A “payment settlement entity” is, in the case of a payment card transaction, a merchant acquiring entity; or, in the case of a third-party network transaction, the third party settlement organization.

The Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, is the form a non-US merchant would provide to be excluded from certain US information reporting (e.g. Form 1099-K and/or backup withholding).

The Form W-9, Request for Taxpayer Identification Number and Certification, is used by a U.S. person (including a resident alien), to provide your correct TIN to the person requesting it (the requester) and, when applicable, to certify that the TIN you are giving is correct (or you are waiting for a number to be issued), that you are not subject to backup withholding, or to claim exemption from backup withholding if you are a U.S. exempt payee.

The Merchant Category Code (MCC) is a four-digit code used by the bankcard industry to classify a merchant's primary business. The MCC describes a merchant's product, service, or nature of business. In cases where a merchant is engaged in more than one type of business, the MCC will reflect the merchant's primary line of business.