If you sell cards on eBay, Whatnot, PayPal, StockX, COMC, or Fanatics Live, there is a tax form coming for you, or already in your inbox: Form 1099-K. Most card resellers either ignore it, panic about it, or pay way too much tax because they misunderstand what it actually reports. This article fixes that.

### What the form actually is

Form 1099-K is an information return filed by a third-party settlement organization (TPSO), not a tax bill. The legal authority is Internal Revenue Code §6050W, which requires payment processors and online marketplaces to report the gross dollar amount they processed for you to both you and the IRS.

Key word: gross. The 1099-K reports every dollar that flowed through the platform on your behalf, before the platform took its cut, before shipping costs, before refunds, before the cost of the cards you sold. It is not your profit. It is not what you owe tax on. It is the starting point for a reconciliation that lives on your Schedule C.

Think of it the way a W-2 reports gross wages: gross income gets reported, and the actual tax bill is calculated after deductions. Same logic here, just for a self-employment context.

### The federal threshold under OBBBA

For tax year 2025 and forward, the federal reporting threshold is $20,000 in gross payments AND more than 200 transactions per platform per calendar year. Both conditions must be met. This was set by the One Big Beautiful Bill Act, P.L. 119-21, which restored the original 1099-K threshold after several years of legislative whiplash.

The history matters because it explains the confusion in reseller forums:

- Pre-2022: $20,000 AND 200 transactions
- American Rescue Plan Act 2021: lowered to $600 with no transaction floor
- IRS implementation: delayed via Notice 2023-10, then Notice 2023-74 (transition years at $20K/200 and $5,000)
- OBBBA P.L. 119-21: restored $20,000 AND 200 transactions permanently

If you cleared $20,000 in gross sales on a single platform AND processed more than 200 transactions on that same platform in 2025, expect a 1099-K. If you crossed only one threshold, the federal form is not required, but state thresholds may still apply.

### Which platforms issue them

Any third-party settlement organization that processes payments on your behalf is required to issue a 1099-K when thresholds are met. For card resellers, that includes:

- eBay (issues for U.S. sellers crossing threshold)
- Whatnot (processes sales for live sellers)
- PayPal (Goods and Services payments only; Friends and Family is not reported)
- Stripe (back-end processor for many platforms; shows as "Stripe" or as the merchant of record)
- StockX (issues for cleared sellers)
- COMC (issues for cleared sellers)
- Fanatics Live, formerly PWCC Live (issues for cleared sellers)

If you sell on multiple platforms, expect multiple 1099-Ks. Each is a separate threshold calculation.

### What it reports, and what it doesn't

A 1099-K reports gross payment amounts. It does not report:

- The cost of the cards you sold (your COGS)
- Shipping costs you paid to deliver
- Platform fees and commissions deducted by the marketplace
- Refunds and returns
- Sales tax collected on your behalf

That distinction is critical. If you sold $30,000 in cards on eBay, paid $9,000 for those cards, paid $3,000 in shipping, and paid $3,000 in eBay fees, your net profit is $15,000. But your 1099-K shows $30,000. If you write a check for tax based on $30,000, you have just doubled your tax bill on a paper accounting error.

### The reconciliation obligation

The 1099-K gross figure must tie to Schedule C Line 1 (Gross receipts or sales). The IRS computer-matching system compares the 1099-K figures it received from platforms against what you reported. If the numbers don't match, that is the most common audit trigger for a card reseller.

The reconciliation looks like this:

- Schedule C Line 1: total gross receipts from all platforms (matches sum of all 1099-Ks)
- Schedule C Line 2: returns and allowances (refunds, chargebacks)
- Schedule C Lines 4 and 36-42: COGS calculation (beginning inventory + purchases - ending inventory)
- Schedule C Lines 8-27: operational expenses (shipping, fees, supplies, grading, mileage)
- Schedule C Line 31: net profit; this is what you actually pay tax on

The 1099-K gross is the top of the funnel. Your tax is calculated at the bottom.

### State threshold variations

Federal is not the only game. Several states have their own 1099-K thresholds, often well below the federal level. If you sold to buyers in those states, or operate from one, the state gets the form even if the IRS does not:

- Rhode Island: $100
- Massachusetts: $600
- Vermont: $600
- New Jersey: $1,000
- Illinois: $1,000 AND 4+ transactions
- Virginia: $600
- Maryland: $600
- District of Columbia: $600

If your buyer concentration is heavy in any of those states, you can hit a state 1099-K with under $1,000 in activity. The state-issued 1099-K still requires reporting on your federal return, even if the federal threshold was not met.

### What to do if you got one and didn't expect it

Don't panic, and don't ignore it. The form is informational; the IRS already has it. Your job is to reconcile.

Steps:

1. Pull all your platform sales history for the year
2. Verify the 1099-K gross matches your platform records (occasionally there are reporting errors; document any discrepancies)
3. Build out your Schedule C: gross on Line 1, then work through COGS and expenses
4. Net profit on Line 31 is what you pay tax on, plus self-employment tax under §1401 if net earnings are over $400

KKATC Cards' Live 1099-K Tracker is built specifically for this reconciliation; it ties platform-by-platform gross to Schedule C Line 1 with state threshold flagging built in.

### What to do if you think you should have gotten one and didn't

Two scenarios:

1. You crossed thresholds but didn't get a form. Possible causes: the platform sent it to an old address, you have multiple accounts, or the form went to spam. Contact the platform's seller support and request a copy.

2. You didn't cross federal thresholds, but you're worried. The federal threshold is $20K AND 200 transactions per platform. If you didn't cross both, you don't get a federal 1099-K from that platform. You still owe tax on net profit; the absence of a 1099-K does not absolve you of the reporting obligation. File Schedule C anyway.

Silence is the audit trigger, not the underlying tax outcome. Every dollar of net profit is reportable whether or not a 1099-K shows up.

### Common mistake: paying tax on the 1099-K amount

This is the single most expensive misconception card resellers make. The 1099-K shows gross receipts. Tax is owed on net profit, which is gross minus COGS minus operational expenses. Without doing the reconciliation work, a reseller who grossed $30,000 might pay tax as if they earned $30,000, when their actual taxable income was closer to $10,000-$15,000.

That difference, on a 22% federal bracket plus 15.3% self-employment tax, can be $5,000-$7,000 in unnecessary tax.

### What This Means for You

The 1099-K is a starting point, not an ending point. Receiving one means a platform processed enough volume to trigger reporting, not that you owe tax on the full amount. Your Schedule C does the actual math. Track gross receipts platform-by-platform, track COGS card-by-card or by inventory rollup, track every operational expense with receipts, and reconcile to Line 1 each quarter so you are not scrambling at year-end. State thresholds matter and can hit at sub-$1,000 activity in concentrated buyer states. If a 1099-K appears unexpectedly, treat it as a reconciliation prompt, not a tax bill.

*This is general tax information, not tax advice. Consult a CPA or enrolled agent for advice specific to your situation.*

What the form actually reports, the OBBBA federal threshold, state thresholds that hit at sub-$1K activity, and how to reconcile gross to your Schedule C.

What is a 1099-K?