2020 1099 Tax form?

dhennen
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Where can I find the US tax forms for 2020?  I saw at least one other person ask the same without any response.  

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Trevor
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@dhennen 

The standard (federal) qualifying rule is - you must process over $20,000 AND over 200 gross transactions through Shopify Payments (does not include third-party payment providers) in a given tax year. Both of these thresholds must be met, not just one. These thresholds are set by the IRS and not Shopify. The IRS mentions these thresholds on their website here.

Please also note these are gross figures i.e. transactions amounts before any refunds, chargebacks, fees or adjustments are deducted.

Most states follow the standard IRS threshold. However, in the last few years, several state-level governments have passed their own legislation which now requires Shopify to file 1099-K forms for merchants at much lower thresholds.

For the 2020 tax year, these are the states which have enacted lower reporting thresholds

  • Federal: >=$20,000 USD AND 200 transactions within the calendar year.
  • Arkansas: >= $2,500 USD in gross payments within the calendar year, no transaction threshold.
  • District of Columbia (DC): >= $600 USD in gross payments within the calendar year, no transaction threshold.
  • Illinois: >= $1,000 USD in gross payments AND 4 transactions within the calendar year.
  • Maryland: >= $600 USD in gross payments within the calendar year, no transaction threshold.
  • Massachusetts: >= $600 USD in gross payments within the calendar year, no transaction threshold.
  • Mississippi: >= $600 USD in gross payments within the calendar year, no transaction threshold.
  • Missouri: >= $1,200 USD in gross payments within the calendar year, no transaction threshold.
  • New Jersey: >= $1,000 USD in gross payments within the calendar year, no transaction threshold.
  • Vermont: >= $600 USD in gross payments within the calendar year, no transaction threshold.
  • Virginia: >= $600 USD in gross payments within the calendar year, no transaction threshold.

Your state will be determined by the address you provided for your Shopify Payments account, which is separate from (and may or may not be the same as) the store address in general settings.

 

If you qualify for a 1099-K form you will see the document appear in the Actions > Documents tab on their Shopify Payments payout page. It's important to note that you need to be logged in as the store owner in order to see this tab. 

 

If you would like to replicate the exact calculation of the 1099-K, to confirm the amounts which would have been reported if you qualified, these are the steps you would follow:

 

  1. Log into your Shopify admin and go to **Settings > Payment providers > Shopify Payments > View Payouts > Transactions**. From here, export your transactions by date. Make sure to set your date range to about 10 days either side of 2020, to make sure you don't miss anything.
  2. Once you've received and opened your export, you will want to sort your transactions based on **column H** (`Available on`). This is the date when the money actually changed hands from the customer's bank to your processing account and is the date Shopify uses for tax purposes. Once you have sorted your spreadsheet, delete any rows with an `Available on` date of either 2019 or 2021.
  3. Next, since the 1099-k only reports _gross_ processing, you will need to sort your spreadsheet by **column B** (`Type`) and remove any rows with a `Type` listed as anything other than `Charge`. This means you will be deleting any rows with a `Type` of Refund, Adjustment, Chargeback, etc.
  4. This will leave your spreadsheet containing only transactions with a `Type` listed as `Charge` and an `Available on` date of 2020.
  5. The final step is to calculate the sum of **column I** (`Amount`). This will correspond to the value which would have been reported on your 1099-K if you had qualified. The number of rows in the export (minus the heading row) will show you the number of transactions.

Let me know if you have any questions. 

Trevor | Community Moderator @ Shopify 
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