ProPay Annually sends IRS 1099-K forms to qualified merchants.
Details of qualification criteria can be located at https://www.irs.gov/businesses/understanding-your-form-1099-k
Additionally, some states have specific reporting requirements that may generate a 1099-K for a merchant.
- All CC & ACH Volume was reported as '3rd Party Processing' in 2020. For 2021, CC Processing will be reported as Payment Card volume and ACH processing will be reported as 3rd Party Processing.
- The IRS de minimis thresholds have been updated such that any merchant processing credit cards will get a 1099-K and any merchant processing more than $600 in ACH volume will should get a 1099-K for that activity.
- The TIN matching reports have been updated to accurately reflect the accounts' status for 'Met Threshold' according to the new IRS guidelines.
- For 2021, volumes will no longer include Spendback and SplitPay activity
Partners and merchants should ensure their business, address and Tax Identification data on file with ProPay is accurate prior to Dec 31 each year to ensure accurate and timely delivery of 1099-K forms.
Payment Facilitation Partners with qualified merchants should receive a TIN-matching report via their SFTP Report subscriptions at https://xfer.propay.com monthly which can be used to confirm with merchants that their data on file is correct.
Merchants using propay.com can manage their information by logging into the website.
Integrated Partners who host their own user interfaces can use the ProPay Account Edit API method to update merchant business information.
1099-K Form Delivery
For SSN-validated accounts, this is generally the home address of the principal owner of the account.
For EIN-validated accounts, this is generally the business address for the merchant, submitted as the principal home address.
The forms will be sent from ProPay. Payment Facilitation partners whose merchants primarily interact with their website/solution may want to inform their merchants to expect the form directly from ProPay to avoid confusion about its purpose.
Previously, bulk PDF forms were delivered to some partners via https://xfer.propay.com. These may still be provided by ProPay, but are not intended to replace the process of physically mailing the forms to merchants directly.
Forms will be mailed to the merchant address on file. The address used is the principal home address.
1099-K Form Corrections and Updates
Merchants who use propay.com can correct their data there and contact ProPay's Customer Service team to request an updated 1099-K.
Changes for amended 1099-Ks should always be accompanied by a contact to the ProPay support teams with accompanying documentation and a request for an amended 1099-K.
If the data update is only for current and future years, no notification is needed to the ProPay support teams.
Due to the updated processes and timelines, corrected or updated 1099-K forms may take 4-6 weeks to process.
Generally, corrections must be submitted by the 12th of the month in order to be included in files sent to the printer.
Corrections are accepted through July.
The initial filing with the IRS occurs in mid-April and corrected forms are filed with the IRS generally in mid-May and mid-July.
Frequently Asked Questions (FAQs)
How will merchants receive 1099-K forms?
Direct mail from ProPay. Digital copies will be provided on request for corrected, missing or updated 1099-Ks.
Digital copies may be available for partners on xfer.propay.com SFTP site in February.
When will forms be sent?
Prior to Jan 31 each year.
To which address will the forms be sent?
To the Know-Your-Customer (KYC) validated home address on file, typically the merchant principal's home address for SSIN-validated accounts, or the business address for EIN-validated accounts.
Why did I or my merchant get 2 forms?
Credit card processing and ACH volumes are reported separately.
If the merchant qualifies for both forms of payment, they may receive two forms.
How are the totals calculated?
Volumes include all settled/completed credit card transactions or ACH transactions.
For 2021, volumes will no longer include Spendback and SplitPay volume.
As a Payment Facilitator, how do I locate data that requires updates to ensure proper TIN matching (Tax Identification Number)?
Payment Facilitators should be receiving a report via https://xfer.propay.com in the /Report1099K folder on a monthly basis containing data related to 1099-K eligible merchants.
If you are not receiving this report, please contact your relationship manager or Client Support to begin receiving it.
How should a merchant correct inaccurate data?
If the merchant uses an integrated Payment Facilitation partner solution, they should update the information on that solution, which should in turn update ProPay's system. If the data correction is for an amended 1099-K, the partner or merchant should contact ProPay support teams to request an amended 1099-K.
If the merchant uses propay.com to manage their account, they should correct data by logging in there and editing their profile and business information.
How long does a merchant have to correct invalid data?
For the current year, merchant data may be corrected up until Dec 31.
To correct information on 1099-K forms for the prior year, merchants may submit corrections through June.
How should I request a copy of a missing or corrected 1099-K form?
Corrections made to Name or Tax ID will trigger the hard copy 1099-K to be re-mailed.
Otherwise, merchants can contact ProPay Customer Service - customerservice [at] propay.com with their account number.
Payment Facilitation partners can email clientsupport [at] propay.com with the ProPay Account Number to request an updated form
What if the 1099-K and data was reported to the IRS on the wrong Tax ID?
The merchant should submit a copy of a correct W-9 form to ProPay in order for the data to be corrected with ProPay and the IRS.
How long will it take to receive a corrected or updated copy of a 1099-K?
Processing requests for new forms may take up to 4-6 weeks. We are exploring ways to decrease that timing.
How can I get further help?
Merchants can contact our customer service team using the details at www.propay.com (866-573-0951), partners can continue to work with Client Support to request help with 1099-Ks.