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IRS Reporting Regulations on Third-Party Payment Transactions

Due to Internal Revenue Service (IRS) regulations, U.S. third-party settlement organizations and payment processors, including Amazon, are required to file Form 1099-K for U.S. taxpayer sellers who meet the following thresholds in a calendar year:

  • More than $20,000 in unadjusted gross sales, and
  • More than 200 transactions.

IRS regulations require non-U.S. taxpayers to provide Form W-8BEN to Amazon in order to be exempt from U.S. tax reporting requirements.

Providing Your Taxpayer Identification Information to Amazon

As a result of these and other upcoming regulations, the following sellers are required by Amazon to provide taxpayer identification information to Amazon:

  • All Professional sellers
  • Individual sellers that exceed 50 transactions in a calendar year, regardless of sales volume

You can provide your information to Amazon by clicking here and using a self-service interview process that will guide you through entering your taxpayer information and validating your W-9 or W-8BEN form. In order to fulfill the IRS requirements as efficiently as possible, answer all questions and enter all information requested during the interview.

Avoid misspellings or entering incorrect Tax Identification Numbers, both of which can result in an invalidated tax form. Move forward or backward through the interview process at your own pace. Don't worry if you're not sure which form (W-9 or W-8BEN) applies to you. The answers you provide during the interview will automatically determine that for you. To help protect the security of your taxpayer identification information, please do not disclose it by e-mail or over the phone.

Help is available throughout the interview process, including links to IRS publications that support the IRS forms W-9 and W-8BEN.

See answers to frequently asked questions below, and learn more at the IRS website.

Important Notice: Information in this document does not constitute tax, legal, or other professional advice and must not be used as such. To find out how this new legislation will affect your business, or if you have other questions, please contact your tax, legal, or other professional adviser.

Frequently Asked Questions

Regulations Tax Identity Collection & Validation Reporting & Document Retrieval 1099-K Form Reconciliation

Regulations

Where can I learn more about the 1099-K and the 6050w regulations?

The regulations are under section 6050W of the Internal Revenue Code. Please see the IRS website for more information.

How do the regulations apply to Amazon sellers?

The following sellers are required by Amazon to provide taxpayer identification information to Amazon:
  • All Professional sellers
  • Individual sellers that exceed 50 transactions in a calendar year, regardless of sales volume

Enter your tax identity information using the short interview process available in your seller account. From the Settings tab select Account Info and then click Edit for the Legal Entity section. Note that this interview can only be accessed by the primary user of your seller account.

Enter your information now

To help protect the security of your taxpayer identification information, we will not ask you to disclose it by e-mail or over the phone.

Do these regulations apply to non-profit organizations?

Yes, these regulations apply to both non-profit and for-profit organizations and entities.

What happens if I don't provide the required information?

If you have not provided valid tax identity information, your seller account will be considered in violation of our Amazon.com selling policies and your account will be suspended.

Tax Identity Collection & Validation

I am a U.S. taxpayer. What information do I need to provide to Amazon?

By completing the tax interview in your seller account, you will be providing Amazon the appropriate tax identity in the form of a W-9 or W-8BEN form.

For U.S. taxpayers, a TIN is required by the IRS for the administration of tax laws. In most cases, your TIN is either an Employer Identification Number (EIN) or a Social Security Number (SSN).

Learn how to obtain an EIN at the IRS website.

I am a foreign seller and not a U.S. taxpayer. Do I need to provide any information to Amazon?

If you are a non-U.S. taxpayer, the responses you provide to the tax interview wizard questions will create the appropriate tax form on your behalf.

IRS regulations require non-U.S. taxpayers to provide Form W-8BEN to Amazon in order to be exempt from U.S. tax reporting requirements.

I am not going to come even close to hitting the reporting threshold. Why does Amazon require my tax identity?

It is Amazon's policy for the following sellers to provide taxpayer identification information to Amazon:

  • All Professional sellers
  • Individual sellers that exceed 50 transactions in a calendar year, regardless of sales volume

I recently switched selling plans from Professional to Individual but I am still seeing seller account notices and receiving e-mails asking me to provide my tax identity information. Do I still need to provide my tax identity information?

It is Amazon's policy for Amazon.com Individual sellers that exceed 50 transactions in a calendar year, regardless of sales volume, to provide tax identity information to Amazon.

Your Amazon selling privileges will be suspended if you exceed 50 transactions but have not provided the required information.

If you have had 25 transactions or more but have not provided your tax identity information, you will continue to see seller account notices and receive e-mails asking you to provide the information.

I've provided my tax identity. How long will it take to see if it is valid?

Validations can take up to three weeks to complete. After you update your tax identity information, the Legal Entity section of your Account Info page will display "Provided and Pending Validation." If we find your information doesn't match IRS records, we will send you an e-mail with instructions on how to proceed.

I received an e-mail stating that my tax identity information is invalid. I thought I provided my correct information. Can you tell me why it came back invalid?

We don't know exactly why your tax identity information came back as invalid, but here are some things to consider:
  • If you are completing the tax identity information as an individual, use the information that appears on your Social Security card.
  • If you are completing the information as a business, use the name that appears on your CP575A notice from the IRS if you are providing a business name.
  • Misspelling your name, not including your middle initial or middle name, or entering an incorrect Tax Identification Number may cause tax identity information to not match to IRS records.

I'm an Individual seller and I received an e-mail saying that my tax identity information needs to be updated. Do I need to do that within 30 days or only once my account reaches 50 transactions?

If you provided tax identity information and it came back invalid, regardless of which selling plan you are on, you have 30 days from the date of the e-mail from Amazon to correct the tax identity information. If you have not provided corrected tax identity information within the 30 day period, your Amazon selling privileges will be suspended.

Reporting & Document Retrieval

Will I receive a Form 1099-K for my seller account?

For each calendar year, if you had at least $20,000 in unadjusted gross sales and more than 200 transactions, a Form 1099-K will be provided to you. If you did not meet both of these thresholds, you will not receive a Form 1099-K. We will track your unadjusted gross sales and number of transactions. You will also be able to tell if you have exceeded the thresholds by monitoring your unadjusted gross sales and number of transactions in your seller account.

When can I expect it?

Amazon will make available to you a copy of your form on or before January 31 of the following year. If you did not consent to electronic delivery, the form will be postmarked on or before January 31 of the following year and will be mailed to the address provided by you in the tax interview. If you consented to electronic delivery, Amazon will send an e-mail to you on or before January 31, of the following year, which will include instructions on how to retrieve your Form 1099-K. For more information on the Form 1099 filing instructions, please visit the IRS web site: http://www.irs.gov/pub/irs-pdf/i1099gi.pdf.

Where do I find my Form 1099-K that Amazon issued for my seller account?

You can find the form in your seller account. From the Reports section, select Tax Document Library, then the appropriate year, and then Form 1099-K.

I did not receive my Form 1099-K in the mail. What address was it mailed to?

The Form 1099-K was mailed to the address you provided in the tax interview. You can also retrieve the form from your seller account. From the Reports section, select Tax Document Library, then the appropriate year, and then Form 1099-K. Click the "Download PDF" link, enter the password, save the form to your computer, and print a copy of it.

Is the $20,000 calculated based on net sales or gross sales?

The $20,000 is calculated based on unadjusted gross sales. Unadjusted gross sales means the total sales, unadjusted for fees or refunds. It is the amount the buyer paid for an order even if the order is later refunded.

Why are sales tax and shipping charges included in my unadjusted gross sales amount?

Unadjusted gross sales equals the amount the buyer paid for the order and includes sales proceeds, sales tax, and gift-wrap and shipping charges.

Doesn't the gross sales amount change if I refund an order?

No. When you make a sale, the order total becomes a permanent part of your unadjusted gross sales for the year. Even if you later refund the entire amount a buyer paid for an order, the order total is still included in your unadjusted gross sales calculation. The IRS regulations require that no adjustments to gross transaction amounts be made. Please seek advice from a tax professional to understand the appropriate adjustments when preparing your tax return.

Here is an example that includes a discount to the buyer, an Amazon fee, and an eventual full refund to the buyer:

Item price $100
Seller promotional discount -$10 (subtracted before the gross sales amount is calculated)
Shipping charge $15

Order total $105 (gross sales amount)

Amazon fee -$20 (subtracted after the gross sales amount is calculated)

The buyer is later refunded in full.

Buyer credit of the order total -$105
Seller credit of the Amazon fee $20
Net $0

The gross sales amount for the purposes of calculating annual gross sales is $105, even after the refund.

If I have multiple seller accounts with the same tax identification number and they exceed the thresholds when the account totals are combined, will you file Form 1099-K for my combined seller accounts?

Yes. Unadjusted gross sales and transaction volumes will be consolidated for all accounts that have the same Tax Identification Number (TIN). Please assist us by providing your taxpayer identification information in each of your seller accounts regardless of thresholds. This will help ensure that we report all accounts with the same TIN on Form 1099-K as required by the new regulations.

Are there instructions on how to use the 1099-K for my tax return?

To find out how this legislation and Form 1099-K affect your business, or if you have other questions, please contact your tax, legal, or other professional advisor.

For Individual filers, see these IRS instructions: http://www.irs.gov/pub/irs-pdf/i1040sc.pdf

For legal entity filers, see Form 1120: http://www.irs.gov/pub/irs-pdf/i1120.pdf

Can Amazon help me with my tax return?

While we are committed to helping sellers understand the requirements under these new tax regulations, we do not provide tax guidance. Please contact a tax professional.

How do I save a copy of the Form 1099-K to my computer?

From the Reports section in your seller account, select Tax Document Library, then the appropriate year, and then Form 1099-K. Click the "Download PDF" link and enter the password. To save the form to your computer, while it is open in Adobe Reader, click File, then Save As, and then PDF. Select a location on your computer and click Save.

For your security your tax form is password protected. The password provided on the Tax Document Library page is required for opening the tax form. If you save the form to your computer, be sure to save the password also because it is required each time you open the file.

If you didn't save the password, log in to your seller account, and from the Reports section, select Tax Document Library. A new password will be provided. Click the "Download PDF" link and enter the new password.

I saved the PDF to my computer, but I no longer remember the password. How can I get another copy of my Form 1099-K?

For your security your tax form is password protected. The password provided on the Tax Document Library page is required for opening the tax form.

If you didn't save the password, log in to your seller account, and from the Reports section, select Tax Document Library. A new password will be provided. Click the "Download PDF" link and enter the new password.

Be sure to save the password because it is required each time you open the file.

I believe there is an error on the Form 1099-K I was issued. How do I get an updated Form 1099-K?

Please contact Seller Support by clicking the Contact Seller Support link at the bottom of any seller Help page, and provide the details of the issue.

1099-K Form Reconciliation

How do I find the transactional level details of my unadjusted gross sales for a specific year?

You can use the Date Range Reports page to generate individual transaction reports for a specific date range.

Note: Reports cannot be generated for dates prior to January 1, 2012. Custom date range reports are limited to 90 days.

To generate a date range report, follow these steps:

  1. From the Reports tab, select Payments.
  2. Select Date Range Reports.
  3. Click Generate a statement.
  4. In the "Generate date range report" pop-up box, proceed as follows:
    1. Select report type: Transaction
    2. Select reporting range: Month or Custom, and the specified date information
    3. Click Generate.
  5. Review your report in the list on the Date Range Reports page.
  6. Note: Reports can take up to 1 hour to generate. If you do not see your report in the list, check again later.
  7. Sort the "type" column by Order.
  8. To calculate unadjusted gross sales, add the amounts in these columns:
    • product sales
    • shipping credits
    • gift wrap credits
    • promotional rebates
    • sales tax collected

How do I find the summary level details of my unadjusted gross sales for a specific year?

You can use the Date Range Reports page to generate summary reports for a specific date range.

Note: Monthly reports cannot be generated for dates prior to January 2012. Custom date ranges are limited to 90 days and cannot be generated for dates prior to January 1, 2012.

To generate a date range report, follow these steps:

  1. From the Reports tab, select Payments.
  2. Select Date Range Reports.
  3. Click Generate a statement.
  4. In the "Generate date range report" pop-up box, proceed as follows:
    1. Select report type: Summary
    2. Select reporting range: Month or Custom, and the specified date information
    3. Click Generate.
  5. Review your report in the list on the Date Range Reports page.
    Note: Reports can take up to 1 hour to generate. If you do not see your report in the list yet, check again later.
  6. To calculate unadjusted gross sales, add the amounts in the report columns listed in the two charts below:
Income: The Income section includes your sales, credits, and refunds.

Line Item Description
Seller fulfilled product sales The total amount of your product sales for seller-fulfilled products.
FBA product sales The total amount of your product sales for Amazon-fulfilled products.
Shipping credits The amount paid by buyers for shipping.
Gift wrap credits The amount paid by buyers for gift wrap.
Promotional rebates The amount deducted from your account balance for promotional offerings.

Sales Taxes: The Sales Taxes section includes the taxes collected on product sales and services.

Line Item Description
Sales, shipping, and gift wrap tax The sales tax collected from buyers for product sales, shipping, and gift wrap. This amount may include deductions for promotional rebates.

Seller Support

Please use the e-mail address associated with your Amazon.com Seller account.
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