Form 1099-K for eBay Sellers in 2026: Threshold, Triggers, What to Do
Form 1099-K rules for eBay and Facebook Marketplace sellers in 2026: the $20,000 and 200-sale threshold, what triggers it, and avoiding tax on non-profit sales.
Every January, a wave of eBay and Facebook Marketplace sellers open a Form 1099-K and panic at the number in Box 1a. That number is almost never what you owe tax on. It is a gross figure, before fees, refunds, shipping labels and what you paid for the items. Knowing what the form is, when you get one, and how it flows onto your return is the difference between paying tax on profit and paying tax on revenue.
This guide covers the 1099-K rules for the 2026 tax year (the forms that arrive in January 2027), as of October 2026.
This is general information, not tax advice. Confirm your situation with a tax professional.
The 2026 threshold: $20,000 and more than 200 transactions
The federal reporting threshold is back where it was before 2022. A payment platform or online marketplace (the IRS calls them third-party settlement organizations) must file a 1099-K when your payments for goods or services total over $20,000 and come from more than 200 transactions in the calendar year. Both conditions must be met.
The One Big Beautiful Bill Act reinstated that threshold retroactively, replacing the $600 rule that had been scheduled. The IRS explains it on its Understanding your Form 1099-K page, and eBay states the same $20,000 and 200-transaction test on its 1099-K help page.
You may still get one below the threshold
Two exceptions are worth knowing:
- The IRS notes platforms may send you a 1099-K with lower amounts. Some do.
- Some states set lower reporting thresholds than the federal one, so a platform may issue a state 1099-K to sellers in those states. If you get one, it is reported the same way.
Which platforms send them
- eBay sends 1099-Ks by January 31 for the prior year. You can download yours in Seller Hub under Payments, then Taxes.
- Meta reports sales that go through Facebook Marketplace's checkout (typically shipped sales). Cash or local sales paid outside the checkout are not on any platform's form.
- Payment apps such as PayPal or Venmo may report goods-and-services payments you received through them.
The most important rule: income is taxable with or without the form
The IRS is direct about this: no matter the amount of reported payments, if you receive payments for selling goods or services, you must report all income on your tax return, whether or not you receive a 1099-K.
So the threshold controls paperwork, not tax. A reseller who did $15,000 in eBay sales and $4,000 in local Facebook cash sales owes tax on the profit from all $19,000, even if no 1099-K ever shows up. Missing a form does not make the income disappear.
What the number on the form actually means
eBay's help page explains that the gross amount on the form does not include adjustments such as credits, discounts, fees or refunds, and does not include sales tax or canceled transactions. In plain terms, it is roughly what buyers paid for items and shipping, before anything came out.
That is why the form looks scary. Here is an example of a reseller's year:
- 1099-K gross from eBay: $26,000 (480 transactions)
- Refunds to buyers: $1,200
- eBay fees and ad fees: $3,900
- Shipping labels: $4,800
- Cost of the items sold: $9,500
- Supplies and mileage: $1,100
Profit: $26,000 - $1,200 - $3,900 - $4,800 - $9,500 - $1,100 = $5,500
The tax is figured on the $5,500 business profit, not on $26,000. But only if you report the expenses and can back them up with records.
How to report it on your return
If you are reselling as a business
This covers anyone sourcing to resell: pallets, auctions, thrift, retail arbitrage. Report sales on Schedule C (Profit or Loss From Business). The full gross goes on line 1, returns and refunds on line 2, and cost of goods sold flows from Part III. Fees, advertising, supplies and car expenses go on their own lines. We cover that in detail in our Schedule C for resellers guide.
If you sold personal items at a loss
Selling your own used couch, clothes or electronics for less than you paid is not taxable income, and the loss is not deductible either. If a 1099-K includes those sales, the IRS 1099-K FAQ describes how to zero it out: report the proceeds on Schedule 1 as other income and an offsetting adjustment of the cost (up to the proceeds) labelled "Form 1099-K Personal Item Sold at a Loss," or use Form 8949 with code "L." The net effect on your income is zero. Your tax professional can tell you which method fits your return.
If you sold personal items at a gain
A collectible or other personal item that sold for more than you paid is a capital gain, reported on Form 8949 and Schedule D.
Mixing personal and business sales
Many resellers clean out their own closet on the same eBay account. Keep a simple list of which sales were personal items, with what you originally paid. Without it, those sales look like business income.
What to do when the form arrives in January
- Download it from each platform (eBay Seller Hub, Meta, payment apps) and check the name and taxpayer ID. The name on your eBay account should match the name on your tax ID and return.
- Compare it to your own sales records month by month. The form shows monthly totals, which makes errors easy to spot.
- If it is wrong, contact the filer listed in the upper left of the form and ask for a corrected 1099-K. Keep copies of the correspondence. If you cannot get it corrected, the IRS says not to wait: file on time and correct the amount on Schedule 1.
- Do not double count. If eBay and PayPal both report the same sale, report the income once and keep notes showing why.
- Hand your tax pro the form plus your books, not the form alone. The form is the top line; your records are everything below it.
AI Flip Ledger keeps the other side of the form all year: eBay sales with fees, labels and refunds matched to each order, Facebook and cash sales, cost of goods from every pallet, mileage at the right IRS rate, and a live Schedule C draft you can print for your tax professional. If you have a question about getting your year set up, email the owner directly at [email protected]. A real person answers.
How to avoid paying tax on sales that made no profit
You avoid it with records, not loopholes:
- Keep purchase receipts and auction invoices. Cost of goods is the largest deduction most resellers have. No receipt, no proof.
- Split pallet and lot costs per item so every sold item carries its cost.
- Log refunds and returns so they reduce gross receipts.
- Keep a mileage log with date, destination, purpose and miles for sourcing runs and post office trips.
- Label personal-item sales at the time you sell them, with the original cost.
- Tag personal payment app transfers correctly. The IRS notes money from friends and family as a gift or repayment should not be reported on a 1099-K, so mark those as non-business in the app when possible.
And plan for the tax on the profit you did make. If you expect to owe, quarterly estimated payments are due April 15, June 15, September 15 and January 15. The fourth 2026 payment is due January 15, 2027.
Frequently asked questions
What is the 1099-K threshold for 2026?
As of October 2026, platforms must file a 1099-K when your payments for goods or services exceed $20,000 and come from more than 200 transactions in the year. Some states use lower thresholds, and platforms may send forms below the federal threshold.
Do I have to pay taxes on eBay sales if I don't get a 1099-K?
If you are selling for profit, yes. The IRS requires you to report all income from selling goods, whether or not you receive a 1099-K. You pay tax on profit after cost of goods and expenses, not on gross sales.
Does Facebook Marketplace send a 1099-K?
Meta reports sales made through Facebook Marketplace's checkout once you meet the reporting threshold. Local cash sales are not reported on any form, but business income from them is still taxable.
I sold my own used items at a loss. Do I owe tax?
No. Personal items sold for less than you paid are not taxable, and the loss is not deductible. If they appear on a 1099-K, report them with offsetting entries so the net is zero, as the IRS FAQ describes.