Cash App and Form 1099-K FAQs
In 2022, the Internal Revenue Service (IRS) made changes to reporting requirements for Form 1099-K. You have questions, we have answers.
Do I need to worry about Form 1099-K?
Form 1099-K is used to report transactions for the sale of goods and/or services through peer-to-peer (P2P) payment services like Cash App. If you have a standard, non-business Cash App account, you don’t need to worry about Form 1099-K. Cash App won’t report any of your personal transactions to the IRS.
Only customers with a Cash for Business account will have their transactions reported to the IRS—if their transaction activity meets reporting thresholds. Keep reading to learn what this means.
What is a Form 1099-K?
Payment services like Cash App file Form 1099-K to report transactions for the sale of goods and services to the IRS.
What transactions are reported on Form 1099-K?
Transactions between a buyer and a seller to exchange goods or services in return for money are reported on Form 1099-K. Sending or receiving money between friends and family to pay for dinners, split bills, or send gifts won’t be reported to the IRS.
If you use Cash App to sell goods or services, we recommend that you upgrade to a Cash for Business account to ensure accurate tax reporting.
What were the recent changes to the Form 1099-K reporting requirements?
Starting January 1, 2022, the American Rescue Plan Act of 2021 requires services like Cash App to report payments for goods and services on Form 1099-K when those transactions total $600 or more in a year. Before January 1, 2022, the annual Form 1099-K reporting threshold was over $20,000 and more than 200 business transactions within a calendar year.
Starting January 1, 2022, if your Cash for Business account has $600 or more in gross sales in the 2022 tax year, it will qualify for a Form 1099-K and Cash App is required to report it to the IRS. This new $600 reporting requirement does not apply to personal Cash App accounts. It’s only for Cash for Business accounts, and it applies only to payments received in 2022 and beyond.
If you have a Cash for Business account, check out Tax Reporting for Cash For Business for more information.
Will I receive a Form 1099-K for payments I receive in my Cash App?
If you have a standard Cash App account, no. If you have an upgraded Cash for Business account, Cash App will only file a Form 1099-K if your business has $600 or more in gross sales in the 2022 tax year.
I use my personal Cash App account to send or receive money between friends and family to pay for dinner, split bills, and send cash gifts. Will I receive a Form 1099-K?
No. Cash App does not issue Form 1099-K for payments made to Cash App personal accounts. Sending or receiving money between friends and family to pay for dinner or to give as a gift are not transactions subject to reporting on Form 1099-K.
What is the difference between Cash App Personal Accounts vs. Cash for Business Accounts?
Your Cash App account is personal unless you upgrade it to a Cash for Business account.
When you create a Cash App personal account, you agree to send and receive peer-to-peer (P2P) payments for personal, non-commercial purposes only. You also agree to limits on how much and how often you use your personal Cash App account, but there are no fees charged to send or receive payments.
Cash for Business users can receive unlimited customer payments from business transactions for a 2.75% transactional fee.
How do I know if my Cash App is a “Cash for Business” account?
If you have a Cash for Business account, your Cash App account profile will have a building-shaped icon.
If I have a Cash for Business Account, when will I receive my Form 1099-K?
If you accepted more than $20,000 and more than 200 business payments in 2021, you will receive a Form 1099-K. Under IRS rules, Forms 1099-K for tax year 2021 must be available to Cash for Business customers no later than January 31, 2022.
If your business account receives more than $600 in payments in 2022, you will receive a Form 1099-K. Under IRS rules, Forms 1099-K for tax year 2022 must be available to Cash for Business customers no later than January 31, 2023.
Will I have to pay taxes when receiving money through my Cash App Personal or Cash for Business account?
If you hold a Cash for Business account and meet the reporting thresholds, you will receive a Form 1099-K and be required to report any income connected with your business account on your income tax returns. Please consult your tax advisor for information on how to file.
If you hold a Cash App personal account and send or receive money for dinner, gifts, or from family or friends, you will not be subject to these new reporting requirements and will not receive a Form 1099-K to file with your tax return.
If you buy or sell stock or bitcoin with your app, you may have other tax documents. If so, you can find them in the app by February 15th by tapping on your profile, then Documents. Or from a computer at cash.app/account/settings.
What if I want to receive payments for my business on my Cash App account?
When you sign up for a Cash App personal account, you agree to send or receive funds for personal, non-commercial purposes only. If you sell goods or services and want to be paid through Cash App, you should upgrade your account to a Cash for Business Account. Here’s how:
- Tap the profile icon in the top-right of your homescreen
- Tap Personal, then Change Account Type at the bottom
- Follow the prompts to complete the upgrade
After completing the upgrade, you can accept payments from your customers at any time. A fee of 2.75% will be automatically deducted from each payment accepted with Cash for Business.
Cash App does not provide tax advice. If you have questions about your particular tax situation you should consult a tax advisor.