Form 1099-K Overview
The Housing and Economic Recovery Act of 2008 created a new reporting requirement for banks and other payment settlement entities to report payment card and third-party network transactions for their participating merchants to the IRS. This reporting requirement is also known as Internal Revenue Code (IRC) Section 6050W (please refer to the IRS website for more information: www.IRS.gov).
The new law requires banks and other payment settlement entities to report payment card and third-party network transactions with their participating merchants. The final regulations contain rules to implement reporting of credit card, debit card and similar transactions, as well as transactions settled through third-party payment networks, such as third-party organizations that settle online transactions.
Beginning in 2012 every payment processor will file Form 1099-K with the IRS reporting the gross amount of each merchant’s card transactions for the 2011 year, as well as provide a corresponding statement to merchants. It’s not simple, so at Vantiv we’re standing by with Form 1099-K Assistance.
Reporting entities are also required to collect and verify the tax identification number (TIN) along with the merchant’s legal name and address associated with the TIN number. If a merchant fails to provide its TIN or if there is a discrepancy between the merchant’s TIN and the associated information in the reporting entity’s records and the IRS’ records, the IRS requires the reporting entity to begin backup withholding of the merchant‘s future payments from card transactions.
Visit the IRS website at www.IRS.gov for detailed information. Then look to Vantiv for Form 1099-K Assistance. We’re here to help.
The information contained in this summary is based on information available at the time of publication, which is subject to change. This information is provided as a convenience and is not intended to be or construed as legal advice. Because of the generality of this communication, the information provided herein may not be applicable in all situations, is not a comprehensive list of issues that could impact your business and should not be relied upon without specific legal advice from your legal, compliance and/or other subject matter expert. Vantiv makes no representations or warranties as to the accuracy or completeness of this information and all such information is provided as a convenience only.