Etsy 1099 Tax Form: Filing Requirements and Steps

🌟 KEY TAKEAWAYS

All Etsy sellers who make more than $20,000 in gross sales and have more than 200 transactions in 2025 will receive a Form 1099-K from the platform.

The 1099-K form is the main document you’ll use to report your income to the IRS. Even if you don’t receive a 1099-K, you must still report all your income on your tax return.

Given the different thresholds in specific states, it’s worth checking the details about the 1099-K requirements in your state. 

Etsy customer service can be very helpful by providing additional information. 

Together with accounting software like FreshBooks, keeping track of your expenses and filling out the 1099-K Form won’t ever be a problem.

The One Big Beautiful Bill Act, signed on July 4, 2025, restored the pre-2021 1099-K federal reporting threshold of over $20,000 in gross payments and at least 200 transactions per year for third-party settlement organizations (TPSOs, such as Etsy).

This means that TPSOs are not required to issue a 1099-K unless both conditions are met. The new reporting threshold applies retroactively to tax years beginning in 2022. 

Under the current threshold, Etsy sellers who earn more than $20,000 in gross sales, have over 200 transactions during the year, or meet a threshold requirement for their state, will receive a 1099-K form as part of their Etsy self-employment tax documents. State and local governments may have their own lower reporting requirements and thresholds for submitting this form that differ from the IRS federal limits. 

Whether you’re concerned about your Etsy hobby income tax or are a professional Etsy seller with your online marketplace, we can help. Here’s everything you need to know about filing the 1099-K form.

Why is the Etsy 1099-K important?

With a 1099-K form, an Etsy seller reports their total gross sales income from the platform for the year. Basically, you need this form to report your Etsy sales to the Internal Revenue Service (IRS) when you file your federal and state taxes. Keep in mind that not all states are participating in the federal “combined” filing program, so you may be required to report your income to your state separately.

You should receive a 1099-K form from Etsy by January 31 of the following year.

Box 1a of Form 1099-K reports the gross amount of payment card/third-party network transactions. This amount is not adjusted to account for fees, refunds, chargebacks, or other costs included in the unadjusted dollar amount of the payment transactions. If the Form 1099-K reports the total unadjusted dollar amount of the payment transactions and you separately incurred selling expenses, you may need to make a separate adjustment to the resulting gain or loss (by reporting your business expenses on Schedule C, Form 1040, when you file your federal income tax return). You should maintain and consult your own records to determine these amounts. The rule is the same for all, whether you’re doing hobby sales or running professional Etsy shops.

If you have worked as a salaried or hourly employee in the U.S., you’re most likely familiar with the W-2 form. Well, the 1099-K form is just as important. But unlike the W-2 issued at the start of the year, the 1099-K doesn’t list wages for your salary pay or consistent hourly pay. Instead, it lists your transaction sales that Etsy processes during the calendar year.

The 1099-K form may also be required to pay state income taxes, depending on the freelancer's location. Different states have their own 1099-K sale thresholds. Also, some states require Etsy to send them the federal 1099-K copy.

Here’s an overview of the threshold amount for states that require one:

Etsy 1099-K requirements

For 2025, businesses selling goods on Etsy need to receive and report their 1099-K earnings on their federal tax return when their gross payment amounts exceed $20,000 USD, and they have more than 200 transactions per year. When you consider the 1099-K form eligibility for your shop, it’s important to keep in mind the following as an independent contractor:

When you consider the 1099-K form eligibility for your shop, it’s important to keep in mind the following as an independent contractor:

Business owners preparing to file the 1099-K form need to meet additional requirements.

Here are the taxpayer ID numbers accepted for the 1099-K form:

For U.S. businesses that use an EIN, it may be necessary to fill in the business name under “Legal Name and Address” on Etsy’s Legal and Tax Information page.

Businesses registered with the IRS that file their taxes as a business should use the EIN and business name they registered with the IRS. Also, they should refer to the IRS letter they received after registration of the EIN. They’ll find the properly matched taxpayer information (name and EIN).

Finally, businesses that file their income tax as individuals may be exempt from the process and be seen as a “disregarded entity.” If a single-member LLC does not elect to be treated as a corporation, the LLC is a "disregarded entity," and the LLC’s activities should be reflected on its owner’s individual federal income tax return. 

People who use the SSN or EIN should enter their legal name for sole proprietorships. This means that a sole proprietor uses the name on their Social Security Card.

You need to verify that your taxpayer information (TIN, name, address) is correct on your digital 1099-K form. If that’s not the case, you’ll have to contact Etsy Support to update your taxpayer ID. You’ll also receive an updated form if you update the taxpayer information between January and March 14, 2025.

You’ll also receive an updated form if you update the taxpayer information between January and March 14, 2024.

How to get a 1099-K from Etsy

Etsy processes all credit card payments via the Etsy Payments sales system. The platform will provide a 1099-K form to any seller who makes more than $20,000 and has more than 200 transactions during the calendar year. Etsy makes this form available in digital format.

You can find yours by following the steps below:

If you prefer snail mail, you can also receive your copy that way. Just follow the steps below:

The form will be available on your Etsy account by January 31 for the previous tax year. You’d have to wait a bit longer to receive the file at your mailing address.

Again, note that the 1099-K form is provided only to sellers who receive over $20,000 in gross payments and have more than 200 transactions on Etsy during the calendar year.

The best way to find out how much you earned is to follow the steps below:

Once you get this part ready, you can start preparing to file the form for your Etsy shop.

How to file your taxes with the Etsy 1099-K form

Everyone who makes money from their Etsy shop, including hobbyists with Etsy income, needs to file taxes using a 1099-K form.

If you file your taxes on your own, you should get familiar with the process in detail. You can always use accounting software like FreshBooks, but you should continue learning about the ins and outs of the process.

There are several steps you should follow:

If you receive a 1099-K form from Etsy, check the taxpayer ID first. Then, you want to review your total gross sales income for your monthly and annual sales. Again, the Etsy Payments CSV file will be useful for data reconciliation.

Etsy sellers must check the information on the 1099-K form and their business expenses records when they file their taxes.

If you ever need help from Etsy, their customer support can help you with the following:

As an Etsy seller, you can contact tax professionals at Etsy about:

But do note that the Etsy team can’t give tax or legal advice.

Consider FreshBooks to track business expenses

A great software tool for tracking business expenses is FreshBooks. This accounting software will have you covered for all your expenses on Etsy or any other platform.

The software is relatively simple to use, and you can get a hold of it even if you aren’t a skilled accountant. Your Etsy sales tax will be much easier to follow, and you won’t have to worry about calculating your self-employment taxes.

Software like FreshBooks can help you avoid a hefty tax bill and automate your accounting needs in the long term. Once the tax season arrives, you’ll be ready to make the payments without stressing out.

FAQs about the Etsy 1099-K

Does Etsy send a 1099-K form?

Etsy will send you a 1099-K form for your Etsy sales income. Whether you have one or multiple Etsy shops, you’ll receive the form based on the total amount of income for all your Etsy shops.

When does Etsy send a 1099-K form?

Etsy sends the downloadable 1099-K forms to all eligible sellers by the end of January each year for the previous tax year. If you choose to receive your copy by mail, it can take a few weeks longer.

How much do you have to make on Etsy to claim it on your taxes?

As mentioned before, you must report all your income to the IRS. You are required to file a return and pay self-employment taxes if your net annual earnings for the year are $400 or more.