Hi all,
Due to new United States tax regulations, Etsy and similar companies will be required to report your 2022 sales to the IRS in 2023 if you make over $600 in the next year. (This change does not impact the 2021 sales thresholds or 1099-K forms for January 2022.)
Starting in January 2022, shops that don’t have taxpayer information on file will be frozen as they near this threshold. In order to ensure there are no disruptions to your selling experience and payouts, please update or review your taxpayer ID and address before the deadline!
We understand that taxes and the required information can be confusing, so we’re sharing some FAQs below. If you have further questions or need assistance, please reach out to our support teams here:
Q: I’m not a US seller, does this apply to me?
A: 1099-K reporting is only for US sellers. If you aren’t located in the US and don’t file a US tax return these regulations do not apply and you can disregard these communications. Please reach out to Etsy support if you need more assistance on updating your shop location.
Q: Does this apply to my 2021 sales and whether I will receive a 1099-K form in Jan 2022 for tax filing purposes?
A: These new sales thresholds go into effect on January 1, 2022, meaning that they will apply to the sales you make on Etsy in 2022. Your 2021 sales are still subject to the existing federal threshold ($20,000 in gross sales and more than 200 transactions in a given calendar year) and certain local state thresholds. You can learn more about the current federal and state thresholds here.
Q: I already have a taxpayer ID on file. Do I need to do anything?
A: If you already added your valid taxpayer information, you do not need to submit anything else at this time. We recommend you review the information on file to ensure that everything is still accurate.
Q: I updated my information, but I’m being asked to provide more documentation.
A: When you update details on your legal and tax information, we must verify it. We may ask you to confirm your information again or provide additional documentation if we need more information for this verification. Learn more.
Q: I updated the address for my shop recently, do I need to change it on the Legal and taxpayer page also?
A: We recommend that you review your legal and taxpayer information to make sure it’s accurate. However, if you update your mailing address in Payment Settings, we’ll automatically update your Legal and tax information page as well.
Q: Why is Etsy making this change?
A: As part of the American Rescue Plan Act of 2021, the reporting threshold associated with Form 1099-K (Payment Card and Third Party Network Transactions) will be reduced from $20,000 in gross sales and 200 transactions to only $600, with no minimum transaction requirements. This pertains to all sales made on online payment platforms, marketplaces, internet payment service providers, and more.
Etsy, along with other companies, is required to comply with these new federal regulations for sales and transactions starting January 1, 2022. Valid taxpayer information is needed to prepare 1099-K forms for eligible sellers in the 2022 tax year.
Q: What if I have multiple shops?
A: Whether you reach the 1099-K criteria in one shop or through the combined sales of multiple shops, you’ll receive one form that shows your total gross sales. Please be sure to use the same taxpayer ID for each shop that you run.
Need additional tax assistance?
Step-by-step instructions on updating your taxpayer information
Everything you need to know about taxes as an Etsy seller
