What's a Form 1099-K, and should I be receiving one from PetPocketbook?

What is a Form 1099-K?

Time to nerd out together šŸ¤“ The Internal Revenue Service (IRS) requires all platforms that process payments in the U.S. to provide information about customers who receive payments for the sale of goods or services. This is filed in the form of a 1099-K, which helps the IRS ensure that businesses are accurately filing their annual tax returns. We work with Stripe, our payment processing partner, to prepare Form 1099-Ks for qualifying businesses that accept payments through our platform. For qualifying businesses, we file the form with the IRS and appropriate state tax agencies, and if we do, we will send you a duplicate copy for reference as well around January 31st of each year.


So how do you know if you "qualify" to receive a 1099-K? PetPocketbook will issue a Form 1099-K to businesses based in the United States that have passed federal and/or state reporting thresholds for payments received through our platform.


The IRS requires us to file a 1099-K form if you have received gross payments in the calendar year 2024 exceeding $5,000 for goods and services.


While most states adhere to federal reporting guidelines, the following states have lower threshold requirements:

  • Arkansas: at least $2,500 in gross payments
  • District of Columbia: at least $600 in gross payments
  • Illinois: at least $1,000 in gross payments AND 4 transactions
  • Maryland: at least $600 in gross payments
  • Massachusetts: at least $600 in gross payments
  • Montana: at least $600 in gross payments
  • New Jersey: at least $1,000 in gross payments
  • North Carolina: at least $600 in gross payments
  • Vermont: at least $600 in gross payments
  • Virginia: at least $600 in gross payments

We do not file 1099-Ks with the following states:

  • Alaska
  • Arizona
  • Colorado
  • Delaware
  • Idaho
  • Indiana
  • Iowa
  • Kentucky
  • Louisiana
  • Michigan
  • Minnesota
  • Mississippi
  • Missouri
  • Nebraska
  • Nevada
  • New Hampshire
  • New Mexico
  • North Dakota
  • Ohio
  • Oklahoma
  • Pennsylvania
  • Rhode Island
  • South Carolina
  • South Dakota
  • Texas
  • Utah
  • Washington
  • West Virginia
  • Wisconsin
  • Wyoming

How do you define "gross payments?"

If you have received a Form 1099-K from PetPocketbook, that means that you received gross payments in excess of the dollar amount and/or transaction count requirements at the federal and/or state level. So how is "gross payments" defined to determine whether you meet the reporting threshold?

Gross payments as reported by PetPocketbook is the total of all charges (credit/debit card or ACH bank transfers) processed on your behalf through our platform via Stripe in the calendar year, including:

  • any tip that pet parents may have included on transactions charged by PetPocketbook
  • if applicable, sales tax paid with payments made online through PetPocketbook
  • any refunded payments originally charged on PetPocketbook in the calendar year (e.g. if you received $100 then refunded the full $100, your 1099-K would show $100 of income, not $0)

It does not include:

  • any off-platform payments you may have received outside of PetPocketbook (such as Venmo, PayPal, Zelle, cash, and check), even if you've manually inputted these payments into your PetPocketbook account. Since we did not transfer those funds into your bank account, we are not a reliable source to validate that income and therefore not obligated to report those transactions.
  • service fees that pet parents pay when checking out on PetPocketbook. Since the service fee is paid to PetPocketbook, this income does not count against you and is not included in the definition of "gross payments" for your business.

How do I use the Form 1099-K that I receive?

We are not tax experts and cannot provide tax advice, so we recommend that you consult a professional tax advisor on how you should use the information received in your 1099-K. 

That said, this form is a duplicate of what we are filing with the IRS and your state tax agency (where applicable) and is being provided to you as a reference. This filing tells the IRS and/or your state tax agency that you have collected at a minimum the amount we reported in payments in our 1099-K. This helps these agencies ensure that businesses are accurately filing their annual tax returns. Especially if you accept other payment methods outside of PetPocketbook, our 1099 represents only a fraction of your total business; as such, we would not expect what is reported on our 1099 to necessarily match what you will be reporting as your gross receipts on your business' tax filings.

If you believe any information on the form is incorrect, particularly your tax ID, legal entity name, and mailing address, please let us know so that we can update that information and file a correction, if necessary!

Why is my name on the 1099-K and not my company name?

For federal income tax reporting, the IRS uses the name of the owner of a single-member LLC as the legal entity. Here is more information on that from the IRS website.

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