This article covers US tax requirements and applies to Wave customers in the US.
Depending on your business, when tax time comes you may need to file both a 1099-K and 1099-NEC. This might feel confusing, but it doesn't have to be. Read on for an overview of each form, and when you need to file it.
At a glance:
File a 1099-K if your business has processed over a $20,000 in credit card payments and over 200 transactions over the calendar year.
File a 1099-NEC for every contractor your business has paid more than $600 in a calendar year.
What is Form 1099-K?
A 1099-K is an informational form that summarizes the online payment activity in your Wave Payments account. If your business uses Wave Payments and you’ve processed more than $20,000 AND also processed over 200 transactions in the calendar year, Wave will provide a copy of your 1099-K to you, and a copy to the IRS.
What is Form 1099-NEC?
Form 1099-NEC (formerly 1099-MISC) is an IRS form that summarizes all non employee compensation your business has paid to a contractor. Independent contractors use these forms to file their taxes.
You must provide Form 1099-NEC to any contractor you paid more than $600 in the calendar year. If you use Wave Payroll, Wave will generate a 1099-NEC form for every contractor who qualifies. Wave can also file these forms for you.