Why am I receiving a 1099-K form from Dwolla?

Some users may be required to receive a 1099-K tax form from Dwolla. Inc. which reports on earnings received via a financial network.

What is a 1099-K tax form?

1099-K tax form indicates payment earnings that have passed through a third-party financial network.  They are issued by credit card and ACH processing companies to report on financial earnings that passed through their processing networks.  This form is not the same as a 1099-MISC tax form which is commonly received by officials from officiating organizations.  These two tax forms are completely different, but may reflect the same earnings in both reports.

Who is Dwolla Inc.?

Dwolla Inc. is a third-party financial processor that powers the Horizon Payment Center.  Any payment transaction processed through the Horizon Payment Center is processed and handled by Dwolla Inc.  As a financial network provider, they have both federal & state reporting requirements to indicate and disclose funds that pass through their processing network.  This information is reported via tax Form 1099-K.

I already received a 1099, why am I getting another one?

A 1099-K tax form is not the same as a 1099-MISC tax form which is commonly received by officials from officiating organizations. These two tax forms are completely different, but may reflect the same earnings in both reports.  If you've earned enough money, both your officiating organization AND Dwolla Inc. will be required to send you tax forms regarding the same funds.  Your officiating organization will likely send you a 1099-MISC (or W-2) tax form and Dwolla Inc. will send you a 1099-K tax form.  Both the federal and state Form 1099-K are information returns and the gross payments reported on a Form 1099-K do not necessarily represent reportable income. The form should be used in conjunction with other tax records (bank statements, invoices, etc.) to report taxable income, if any.  Please consult your tax advisor to determine your tax reporting requirements.

Who receives a 1099-K tax form?

In order to receive a 1099-K tax form, your must have received payments via the Horizon Payment Center and meet one of the following conditions:
  • You have received over 200 gross payments during the calendar year totaling $20,000 USD or more

  • You reside in the state of Vermont, Massachusetts, Mississippi, or the District of Columbia and you have received more than $600 USD in gross payments within a calendar year.

  • You reside in the state of Missouri and you have received more than $1,200 USD in gross payments within a calendar year.

  • You reside in the state of New Jersey and you have received more than $1,000 USD in gross payments within a calendar year.

  • You reside in the state of Arkansas and you have received more than $2,500 USD in gross payments within a calendar year.
Vermont, Massachusetts, Mississippi, Missouri, New Jersey, Arkansas and the District of Columbia are the only states/territories that have different thresholds than the federal requirement at the time that this article was written (December 2019).

What do I do with this?

Both the federal and state Form 1099-K are informational returns and the gross payments reported on a Form 1099-K do not necessarily represent reportable income. The form should be used in conjunction with other tax forms (like W-2's and 1099-MISC forms) and tax records (bank statements, invoices, etc.) to determine your a taxable income.You should consult your tax advisor to determine your tax reporting requirements.

Where can I learn more?

If you want to learn more, you can refer to the IRS website which outlines full details on both the 1099-K tax form as well as the 1099-MISC tax form.

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