Does Shopify Send You a 1099? What the Shopify Payments 1099-K Covers

Shopify sends a Form 1099-K for the sales it processed through Shopify Payments, and only once they pass the federal threshold of more than $20,000 and more than 200 transactions in a calendar year, or a lower threshold in your state. The number on it is what your customers were charged, before refunds, chargebacks, and fees. Anything you sold through another payment method is not on it.

Only Shopify Payments counts

Shopify's form covers transactions processed through Shopify Payments and nothing else. Shopify names what is left out: PayPal Express, manual payment methods, and cash sales. A store that takes both Shopify Payments and PayPal Express can therefore receive two 1099-Ks from two different companies, each covering its own share of the same store's sales, and PayPal applies its own threshold to its share. The IRS says to use all the forms you receive and your own records to work out your income, which in practice means counting each sale once. If you run more than one store under the same tax ID, Shopify combines their volume to decide whether a form is due.

The threshold, and the states that go lower

Shopify's help page lists the federal threshold by year: more than $20,000 and more than 200 transactions for 2025, more than $5,000 for 2024 under the IRS's temporary rule that year, and the same $20,000 and 200 for 2023. The page has no 2026 line yet, but the federal rule for 2026 is the one listed for 2025, because the One Big Beautiful Bill Act restored the $20,000 and 200 test for 2025 and the years after. Our guide to the 1099-K covers how that test works.

States are a different story. Shopify's table of 2025 state thresholds runs from $600 in the District of Columbia, Maryland, Massachusetts, Montana, Vermont, and Virginia, to $1,000 in New Jersey, $1,000 and at least four transactions in Illinois, $1,200 in Missouri, and $2,500 in Arkansas. California's $600 line applies only to app-based drivers. A seller well under the federal test can still get a form because of where the store is.

Why the number is bigger than your payouts

Shopify says the 1099-K does not deduct refunds, chargebacks, processing fees, or Shopify Balance bills, and that it reports what was collected, not your net income. That matches the IRS definition of the box, which is the gross amount with no adjustment for fees, refunds, or shipping. So the form will almost always be higher than the deposits in your bank account. Report your gross receipts, then deduct processing fees, refunds, and chargebacks as their own lines. Shopify's payouts export, which separates the amount, the fee, and the net for each payout, is the record that ties the two together. Our guide to Shopify bookkeeping walks through booking payouts this way all year.

Sales tax is inside the form, and it is not your income

Because the form reports what customers were charged, the sales tax you collected at checkout is in it, along with any shipping you charged. The IRS says sales tax imposed on the buyer is not included in gross receipts and is not a deductible expense either. It simply passes through you to the state. Leave it out of income and keep Shopify's sales tax report, which shows what you collected by jurisdiction, to explain the difference between the form and your return. Orders through the Shop channel work differently: since January 1, 2025, Shopify's affiliate collects, remits, and files sales tax on Shop channel orders shipped within the United States, and deducts it from your payouts. For the rest of your store, registering and remitting is still your job, wherever you have sales tax nexus.

The year-end cutoff runs on UTC

Shopify counts a transaction by when it posted to your Shopify Payments account in UTC, not by when the order was placed. UTC is six hours ahead of Central time in winter, so for a store in Chicago, a charge that posts after 6 p.m. on December 31 already belongs to January 1 and lands on the next year's form. If your year-end sales total and the form disagree by a few orders, check the evening of December 31 first.

Whose name and number are on it

If your Shopify Payments business type is individual, sole proprietor, or single-member LLC, Shopify reports the income under the account representative's name and Social Security number or ITIN. That is how a single-member LLC is taxed by default, so it is usually right. If your LLC elected to be taxed as a C or S corporation, contact Shopify Support to report under the business name and EIN, because the IRS expects a form showing your personal number to be corrected when the income belongs on a corporate or partnership return.

You can update the name, address, or tax ID on the form yourself in the admin, under Finance, then Documents, then 1099-K, until July 15 of each year. Shopify reviews tax information ahead of time, and if you do not update it when asked, payouts can be paused until it is verified.

Where the form appears

Shopify delivers the 1099-K in January for the previous calendar year, in the admin under Finance, then Documents, then 1099-K, and Shopify files it with the IRS itself. A form or not, every sale is reportable income, and most small stores never cross the federal line at all. What decides your tax is your gross receipts and your costs, including cost of goods sold, not whether Shopify filed paperwork.

This article is general information, not tax advice. Tax rules change and every situation is different. Confirm the details against current IRS guidance or talk to a qualified tax professional before you file.