Prepare for New 1099-K Reporting Requirements Across the U.S.

David Dobbins
May 14, 2020

A trend is emerging across the country. In the last year, Illinois, Virginia, Florida and Maryland changed their reporting requirements for the 1099-K.

Below are the new requirements, by state:


Beginning with tax year (TY) 2019, issuers of Form 1099-K will be required to submit those reports to Illinois electronically if required by the IRS to file them electronically. Beginning with TY 2020 and after, issuers of Form 1099-K will be required to submit those reports to Illinois electronically when four or more separate transactions that exceed $1,000 are reported or if you are required by the IRS to electronically file Form 1099-K. The filing due date for TY 2019 will be March 31, 2020. Find more information here.


Under the new law third-party settlement organizations (TPSOs) must report payments made to participating payees with a Virginia address if those payments are greater than or equal to $600. This change is effective July 1, 2020, applicable to payment transactions made on or after January 1, 2020 with reporting due in April 2021. Find more information here.


Under Section 212.134 of the Bill, payment settlement entities and other third-party facilitators who handle payment card and third-party network transactions must file a 1099-K return with Florida pursuant to IRC Section 6050W. 1099-K returns will be due by the 30th day following the IRS due date and are required from payment settlement entities operating in Florida or those filing 1099-K reports on behalf of participating payees with an address in Florida. All returns must be filed electronically. Failure to file a required 1099-K return will result in a $1,000 penalty for each failure for each month the return is due, with the total penalty amount imposed on a reporting entity capped at $10,000 annually. Penalties may be waived by the executive director if a failure to file was due to reasonable cause and not willful negligence, willful neglect, or fraud. This 1099-K filing requirement will become effective January 1, 2021.


SB 192 requires TPSOs who must issue Form 1099-K to report payments made to their payees if the amount of the reportable payment meets or exceeds the filing threshold under §6041(A) of the Internal Revenue Code. This change effectively strips away the transaction number from the federal reporting threshold established in §6050W of the Internal Revenue Code and lowers the dollar amount to $600 or more in reportable payments. SB 192 is effective as of June 1, 2020 and is applicable to payments made on or after January 1, 2020 with reporting due to the Comptroller’s Office and the participating payee at least 30 days before the federal filing deadlines for the information. Find more information here.

There are currently 9 states, including Maryland, that have 1099-K threshold reporting below the federal threshold: Massachusetts, D.C., Mississippi, Vermont, New Jersey, Arkansas, Illinois, Virginia and Maryland.

According to tax and regulatory experts, many other states will follow suit, and soon.

To learn more about recent state reporting changes, download our free webinar – “How to Conquer State Reporting Like the Experts”.

Download for free today.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.


David Dobbins

Content Marketing Manager
Share This Post

LATAM VAT & Fiscal Reporting
May 20, 2020
Sovos Acquires Taxweb, Extends Tax Determination Capabilities in World’s Most Challenging Compliance Landscape

Earlier this month Sovos announced its second acquisition of 2020, completing our solution for Brazil with an unparalleled offering that solves tax compliance in the place where it is most challenging to do so.  Too many companies doing business in Brazil have been burdened by managing multiple point solutions for continuous transaction controls (CTCs), tax […]

August 11, 2020
10 Steps to Expand Your Winery

Looking to enter a new market or bring new wines to the marketplace? Growing any business can be complicated, and the beverage alcohol industry is no exception. Not knowing how or where to begin can be the biggest hurdle. From market research and branding to strategic considerations and compliance, this 10-step guide will get you […]

August 10, 2020
Ask Alex: Your Bev Alc Compliance Questions Answered (August 2020)

Do you have questions about the rules, regulations, and compliance requirements of the beverage alcohol industry? This series, Ask Alex, is a perfect opportunity to get those pressing questions answered straight from one of the industry’s regulation and market experts, Alex Koral, Senior Regulation Counsel, Sovos ShipCompliant.  To take advantage of this opportunity and get […]

Tax Compliance
August 7, 2020
GAO Urges IRS to Overhaul 1099 Reporting for the Gig

A couple of weeks ago, the Government Accountability Office (GAO) released a report to the Senate Finance Committee describing the issues the IRS faces in enforcing income tax compliance for gig economy workers. The report highlighted long-standing issues the government has been grappling with in receiving tax information necessary to enforce compliance along with specific […]

EMEA VAT & Fiscal Reporting
August 4, 2020
New VAT Rules for Online Marketplaces and Imports of Goods into the UK

The United Kingdom’s HMRC has issued new guidance on the VAT treatment of cross-border sales of goods and online marketplaces beginning 1 January 2021, following the end of the transition period. Cross-Border Sales under £135 New rules will apply when a business sells goods for £135 or less to a UK customer and the goods […]

EMEA VAT & Fiscal Reporting
August 3, 2020
New EU Tax Package: VAT Priorities

On 15 July 2020, the European Commission (EC) adopted a new Tax Package, intended to increase tax compliance while reducing administrative burden on businesses. The Tax Package contains a number of proposals related to VAT, of which three in particular stand out: A single EU VAT registration for taxpayers; Modernized VAT reporting obligations; and Facilitated […]