No 1099-MISC if Paid by Credit Card

[TaxMama Note: Another bookkeeping nightmare. Are YOU keeping track of how you pay YOUR vendors and service providers?]

No 1099-MISC if paid by credit card (01-19-2012)

In the instructions to Form 1099-MISC, the IRS has made it clear that payments made with a credit card, or through any third-party payer, are not reported on Form 1099-MISC. These amounts are now reported on Form 1099-K. Thus, if a business pays a service-provider with a credit card, debit card, gift card, or electronically via a service like PayPal, the payment is not included on a 1099-MISC.

Form 1099-K is new for 2011. The form is issued by a credit card company or other third-party payer (such as PayPal) to payees if the payee has more than 200 transactions and more than $20,000 of gross income paid to them. The 1099-K is not issued by either the buyer or seller.

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2 thoughts on “No 1099-MISC if Paid by Credit Card

  1. Stephanie says:

    I don’t suppose you’d consider commenting on the post I have made about this which I’ve linked to this answer on my blog. A lot of CPAs are in disagreement and it would be awesome to put a stop to the double reporting issue that is happening for 2011 which will be a bookkeeping and tax nightmare when normally it’s quite easy for me. 🙂


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