Note: Etsy issues 1099-K forms to US sellers in accordance with IRS tax requirements. If you are not a US seller and are not being paid in USD, you will not receive a 1099-K from Etsy.
What is a 1099-K form?
Etsy, like other payment processors, is required by US law (IRS Section 6050W) to send out a 1099-K tax form. A 1099-K form from Etsy reports the total gross sales income you received through Etsy Payments during the last calendar year.
“Gross sales” includes all of your sales – shipping, refunds, card processing fees, sales tax, and even cancelled orders.
Don’t worry, though – you only pay taxes on your profit (gross sales minus expenses and deductions). For more information on this, check out this Seller Handbook post.
For purposes of the 1099-K tax form, the following payments are not considered "Etsy-processed payments":
- Payments processed through your own PayPal account
- Money orders
- Bank transfers
- Other alternative payment methods
While Etsy is not able to provide tax advice to our sellers, our goal is to help you understand and navigate these requirements. We want to make dealing with taxes as easy as possible.
Providing taxpayer information for Etsy Payments
Once you reach 100 transactions for Etsy Payments totalling over $10,000, we'll reach out to you through email about providing your full taxpayer information. If you don’t provide this information before you reach 150 transactions for Etsy Payments totalling over $15,000, we'll need to temporarily disable Etsy Payments for your shop until your taxpayer information is provided.
If you're a US seller, use Etsy Payments, and need to add or update the taxpayer ID on file with your shop, go to Shop Manager > Finances and click on the Taxpayer ID tab. If you’re signed in, clicking here will take you to your Taxpayer ID page.
The only US taxpayer IDs accepted on Etsy are:
- A federal EIN (Employer Identification Number) or
- An SSN (Social Security Number)
In most cases, when using an Employer Identification Number (EIN), we'll need your business or entity name under "Legal Name and Address" on the Taxpayer ID page of your Etsy account. This should be the business name that is registered to the EIN with the IRS.
Note: if you are a sole proprietorship, you may need to use an individual legal name with your EIN.
If you are using a Social Security Number (SSN), you must enter your individual legal name or the name listed on your Social Security Card.
We can't accept state tax ID numbers as a form of taxpayer identification.
If you provided incorrect taxpayer information for this current tax year and have already received a 1099-K, you’ll need to update your information between 1st February and 1st March to receive an updated 1099-K by April.
If your taxpayer information on file does not match the IRS database, you will receive notifications from Etsy asking you to update it before the end of the fiscal year. If you are unsure of your correct taxpayer information, we recommend contacting the IRS directly to confirm these details.
Requirements to receive a 1099-K form
Etsy is required to issue a 1099-K form to you and the IRS if you meet both of these requirements:
- You had $20,000 USD in sales through Etsy Payments during the calendar year.
- You received 200 or more payments through Etsy Payments over that period.
If you are approaching – or have already processed – $20,000 and 200 payments through Etsy Payments, Etsy will email you towards the end of the calendar year to ensure that your taxpayer information and mailing address are correct.
If you run multiple shops, the sales across all your shops will be combined to determine whether you have met the reporting thresholds. You are required to have the same taxpayer information on each of your shops. If your combined shop totals qualify, you will receive a separate 1099-K for each shop.
Etsy will mail out 1099-K forms to qualifying sellers by the end of January. If you believe you’ve processed over $20,000 and 200 transactions through Etsy Payments within the calendar year but have not received a 1099-K by the end of February, you should contact Etsy.
If you use your own PayPal account to accept payments for Etsy orders, you may receive a separate 1099-K from PayPal.
As a payment processor, PayPal is also required to send out 1099-K forms to Etsy sellers who meet the IRS thresholds of $20,000 and 200 payments. Contact PayPal for more information.
Keep in mind that PayPal will not report payments processed through Etsy Payments. You can rest assured sales won’t be reported twice.
Exceptions by state
Sellers based in the following states are exempt from the 1099-K eligibility threshold:
Sellers based in these states will receive a 1099-K form if they have $600 or more in sales through Etsy Payments in a calendar year.
If these sellers also meet the $20,000 in sales and 200 payments thresholds, that information will also be reported to the IRS as well as the state tax authorities for Massachusetts and Vermont.
Understanding revenue in Stats versus gross sales
Revenue in your Etsy Stats
This is the amount of money your shop has made from sales across all payment methods. Only listing prices are tracked in Stats.
Expenses, such as shipping fees and sales tax, are not included here.
Gross is your total revenue with expenses included. Expenses can be refunds, shipping costs, sales tax, etc.
The gross sales you made through Etsy Payments is what Etsy is required to report to the IRS once you’ve met the Etsy Payments requirements. Your gross sales amount for Etsy Payments will appear on the 1099-K form and your Taxpayer ID page here.
Net Profit is your gross sales minus your expenses.
Expenses can include refunds, shipping costs, sales tax, possibly the cost of materials, etc. To know for sure what may qualify as an expense, you should get advice from a local tax professional.
Revenue in Stats vs. 1099-K Totals for Etsy Payments
Your revenue figures in Stats will probably be different from the figures you’ll see on a 1099-K.
This is because:
Stats shows the “revenue,” which is the total amount of money your shop has made from sales across all payment methods without including expenses.
- The 1099-K form will only show gross sales you’ve made through Etsy Payments, which includes expenses like refunds, shipping costs, sales tax, fees, etc.
Once you’ve received your 1099-K and have begun the process of reporting your earnings to the IRS, you will have the opportunity to deduct your expenses so they won’t be taxed.
How do I reconcile my 1099-K?
Etsy has taken every measure to ensure that your 1099-K is accurate. Don’t worry, though – you only pay taxes on your profit (gross sales minus expenses and deductions). You will be able to indicate your expenses on your tax return.
Etsy is required to report your total gross sales income from Etsy Payments on the 1099-K form without subtracting expenses, such as (not a complete list):
- Shipping costs
- Sales tax collected
According to the IRS, gross amount means, “the total dollar amount of total reportable payment transactions for each participating payee without regard to any adjustments for credits, cash equivalents, discount amounts, fees, refunded amounts or any other amounts.”
To reconcile the 1099-K form issued for your Etsy Payments sales, you can refer to your Etsy Payments CSV, which you can download here.
Here is a breakdown of the information included on your Etsy Payments CSV:
Gross: Order total charged to the buyer and included on the 1099-K form issued by Etsy.
Fees: Payment processing fee for Etsy Payments.
Net: Order total minus the payment processing fee.
Adjusted Gross: Order amount after refund issued.
Adjusted Fee: Payment processing fee after credit for a refund.
Adjusted Net: Amount after a refund is deducted and payment processing fee credit.
- Refund: Refund amount issued to back to the buyer for their order.
Finding your expense totals
To determine your expense totals, you can download various CSV spreadsheet files from your shop. To see which are available to you, click here.
Here are the types of CSV spreadsheets you can download:
This file will give you the sales completed in your shop, regardless of payment method.
Also includes sales tax collected, shipping cost amounts charged to buyers, and payment processing fees for Etsy Payments.
Etsy Payments funds
This file will contain all of the Etsy Payments sales completed in your shop, including orders that have been refunded and canceled. This CSV spreadsheet can be used to reconcile the 1099 K form issued by Etsy.
Download your Orders and Etsy Payments CSV files by going to Shop Manager > Settings > Options and clicking on the Download Data tab.
Select the type of CSV file from the dropdown under the Orders section. You can download the file either by month or year. Be sure to save the file to your computer.
Your monthly statements include Etsy fees (like listing, transaction, and Etsy Payments payment processing fees) and service costs (like if you use Shipping Labels on Etsy or Promoted Listings).
To download this CSV file:
- Sign in to Etsy.com
- Click Shop Manager.
- Click Finances.
- Click Payment account.
- Scroll down to Monthly statement.
- Click See all monthly statements.
- Click a month.
- Click CSV to download the CSV for that monthly statement.
This CSV spreadsheet Includes the shipping label costs you’ve paid.
You can download your daily or monthly shipping label information by going to Shop Manager > Orders & Shipping > View shipping labels > Purchased labels > Summary.
Click the gear icon to the right of a date and select Download CSV. To download shipping label data for an entire month, click View by Month. To view a full year, only select the year and leave the month field blank.
Please keep in mind that we’re not able to offer specific tax advice. If you need further assistance with calculating your expense totals for tax reporting purposes, please contact a tax professional.