Whatnot 1099-K and Seller Taxes: What You Need to Know

This guide is general information, not tax advice. Talk to a qualified tax professional about your situation.

Income is taxable either way

The IRS FAQ states: "All income, no matter the amount, is taxable unless the tax law says it isn't – even if you don't get a Form 1099-K." A 1099-K is an information return. It reports what a payment platform paid you. The reporting threshold changes whether a form is sent, not whether the income counts.

The federal 1099-K threshold

The IRS says a third-party settlement organization, which includes payment apps and online marketplaces, reports only when gross payments to a payee exceed $20,000 and the number of transactions exceeds 200. Both conditions must be met.

The One Big Beautiful Bill Act, signed July 4, 2025, reinstated the threshold that applied before the American Rescue Plan Act's $600 rule. The IRS says the change is retroactive. Its October 23, 2025 news release (IR-2025-107) and Fact Sheet 2025-08 cover the change.

Two points to keep in mind:

• The threshold is a reporting rule, not a tax exemption.
• Card transactions follow a different rule. The IRS says there is no minimum reporting threshold for payment-card transactions.

How Whatnot issues 1099-Ks

For tax year 2026, Whatnot works with Stripe to issue Form 1099-K to US sellers who cash out through a connected Stripe account and meet the federal or a state reporting threshold. According to Whatnot's help center:

• Forms for 2026 will be in Seller Hub by January 31, 2027, and the form reports all of your 2026 Whatnot earnings. You get an email pointing to the electronic copy.
• From mid-November 2026, eligible sellers get an email asking them to add or correct their Taxpayer Identification Number (TIN) and opt into paperless delivery.
• Sellers who only ever cashed out with PayPal don't get a 1099-K from Whatnot, though they may get one from PayPal.
• You can't opt out once you pass the threshold. Accounts that share a TIN are combined into one form.
• Every seller can download monthly and annual Seller Statements with income and expenses, whether or not a 1099-K is issued.

The 1099-K threshold has moved around: $20,000 and 200 transactions for 2023 and earlier, a temporary $5,000 for 2024, then back to $20,000 and 200 transactions for 2025 and 2026. That's why some sellers got a form for 2024 but not since.

Sales tax on marketplace sales

Most states with a sales tax have marketplace facilitator laws. These laws generally make the marketplace responsible for collecting and remitting sales tax on sales it facilitates. TaxJar tracks these laws by state, and the list changes, so check the current status for your state.

Some sales can still be your responsibility:

• Sales made off the platform, such as direct payments or sales at your own events.
• Inventory you buy for resale, where a resale certificate may let you skip paying sales tax; rules vary by state.
• Some local taxes, which vary by jurisdiction.

Check Whatnot's help center for which states it collects in, because the list changes.

State thresholds

Some states set lower 1099-K thresholds, so you can get a state-only form even below the federal limit. Whatnot's help center lists these states as possibly having lower thresholds for 2026:

State	2026 threshold
Arkansas	$2,500
District of Columbia	$600
Illinois	$1,000 and 4 transactions
Maryland	$2,000
Massachusetts	$600
New Jersey	$1,000
Vermont	$2,000
Virginia	$600

Confirm with your state's revenue department, since state rules change.

Records to keep

A 1099-K shows gross payments, which may not match what you received after fees, refunds and cancelled orders. Reconcile the form against your own records. Keep:

• Purchase receipts for inventory, which support your cost of goods sold.
• Shipping supplies and postage.
• Platform fees and payment processing, as shown in your payout and tax records.
• Refunds, cancelled orders and returns.
• Any expenses for shows or equipment.

Business income is reported on Schedule C, which the IRS describes as the form used to report income or loss from a business you operated. Gross sales minus these expenses is your profit for that form.

Self-employment income can also mean quarterly estimated tax payments and self-employment tax. Ask your tax professional whether these apply to you.

For bookkeeping and reconciliation tools, see the accounting and tax category. For tracking profit by show, category and buyer, see analytics and P&L tools.