Form 1099-K and Backup Withholding
Description
What's in this article?
What is a 1099-K?
Form 1099-K is an Internal Revenue Service (IRS) tax form that reports gross payments that you received through our platform for the tax year.
- Gross payments are payments before any fees, adjustments or refunds are applied.
- If no payments were processed, you will not receive a 1099-K since there’s nothing to report.
- If backup withholding was applied to your payments, that amount will also be shown on the form.
We will mail your tax form by January 31st to the legal address we had on file as of December 31st for the tax year. If you selected paperless delivery of tax forms, you will not receive tax forms in the mail.
How to download your 1099-K
You can access and download your tax forms through Business Advantage 360 online banking. In your online banking account, find your tax statements under the Accounts tab, then select Statements & Documents.
What is a B-Notice?
B-Notices are sent if the IRS couldn’t match the Legal Name or Taxpayer Identification Number (TIN) on file. You should correct the mismatched information as soon as possible by following the instructions on the form. If you do not respond by the date indicated in your B-Notice, we will begin backup withholding.
How to correct a B-Notice
If you have received a B-Notice, please follow the instructions provided and submit the required documents – such as W-9 form, Social Security Card copy or IRS Letter 147C. This helps avoid backup withholding and keeps your account in good standing.
What is Backup Withholding?
If you do not correct the mismatched information by the date in the B-Notice, backup withholding will begin. The IRS requires us to withhold a percentage of your payments because of the missing or incorrect tax information. The Federal backup withholding is 24%. California and Maine also require withholding for state taxes. If your business is located in California, an additional 7% is withheld. If your business is located in Maine, an additional 5% will be withheld. These rates are applied daily to your gross sales.
To stop withholding, please follow the instructions in the B-Notice and provide correct tax forms, such as W-9 form, Social Security Card copy or IRS Letter 147C.
What is Form 592-B?
If you are subject to backup withholding and your business had California state income tax withheld, you will also receive a Form 592-B This form is only available through mail.