- What Is A 1099-K?
- What is Included in Affirm 1099-k?
- 1099-K Reporting Requirements
- How Do I Receive The Affirm 1099-K?
In past years, Affirm was not required to file a 1099-K with the IRS for our merchant partners. However, the requirement changed when we began originating our own loans via Affirm Lending Services.
This article covers the content of the 1099-K form, how Affirm issues it, and how merchants can receive it.
What Is A 1099-K?
Form 1099-K, Payment Card and Third-Party Network Transactions, is a tax form used to report transactions made via payment settlement entities within the United States. Affirm is now considered a Third-Party Network and is required to file and provide 1099-Ks for each merchant whose ALS loan volume meets certain federal and state thresholds.
ALS loans refer specifically to loans originated by Affirm Lending Services, which at this time will only be our Pay-in-4 loans (loans offering four bi-weekly payments). As such, this Reporting Requirement will only pertain to merchants on our Pay-in-4, Adaptive Checkout, and hybrid financing packages.
What is Included in Affirm 1099-K?
The Affirm 1099-K only includes transactions related to its subsidiary ALS:
- The total gross amount of all payment transactions
- The total number of transactions from loans disbursed for which Affirm believes it has a reporting obligation based on the applicable statute
- Transactions that Affirm is required to report by law
Other Form 1099-K reporting obligations may or may not exist with the Affirm funds flow ecosystem. Consequently, the amounts reported on your Form 1099-K will likely not match the total amount of disbursements on your account in your Affirm Merchant Portal.
As each Affirm partner evaluates their responsibility for Form 1099-K reporting based on applicable laws, regulations, and administrative guidance, we encourage you to discuss any questions with your tax advisor before contacting Affirm regarding:
- The data contained on your 1099-K
- The potential tax consequence concerning amounts reported/ not reported on the Affirm 1099-K
1099-K Reporting Requirements
2023 Tax Year
As thresholds are changing for 1099-K. All merchants and originating banks must be issued a form 1099-K if they received more than $600 in settlements from ALS.
2022 Tax Year
Beginning in 2022, the merchant must be issued a Form 1099-K if they received more than $600 in settlements from ALS, regardless of the number of individual payments or transactions.
2021 Tax Year
For 2021, Form 1099-K is only required if both of the following criteria are met:
- The merchant processed more than $20,000 worth of payments via ALS loans
- The merchant received more than 200 individual settlements from ALS.
Note: These criteria represent only the federal thresholds. State filing criteria is based on varying payment volume, and does not include a settlement threshold. The applicable states and their thresholds are noted below:
|State||Total Gross Payment Volume ($)|
For further details, click here.
How Do I receive The Affirm 1099-K?
As of 2023, Affirm has been authorized to have the forms mailed both electronically and physically , when applicable.
During tax season, Affirm will automatically email digital copies of the 1099-K to merchants who meet the reporting requirements and have updated their terms of service with us to the email address listed on their Affirm Merchant Portal. If this step has not been taken, the form will be physically mailed to the address on file.
In some cases a Merchant may not receive The Affirm 1099-K:
- If their transactions via ALS did not meet the applicable filing thresholds.
- If they are a Shopify SPI merchant, they may receive a Form 1099-K from Shopify with respect to SPI transactions.
- If their transactions are processed through Affirm’s relationship with Stripe, they may receive a Form 1099-K from Stripe.
- If the merchant received disbursements from other members in the payment ecosystem (e.g., bank partner, VCN payment network).
Note: Tax1099.com is the current provider Affirm uses to file electronic forms. Rest assured the emails received from firstname.lastname@example.org are legitimate and safe to open as they contain the Affirm 1099-K form.
Other Form 1099-K obligations may or may not exist within the Affirm payment ecosystem. It is up to those Affirm partners to undertake their own independent evaluation of any tax reporting obligation. As a result of this the amounts reported on your Form 1099-K will likely not match the total amount of disbursements on your account in the Affirm Merchant Portal.
If you experience any issues accessing the form or come across any errors that should be rectified, reach out to our Merchant Care team using the Business Resource Hub help widget for further assistance.