Do marketplaces using Balanced need to provide 1099's to merchants?
As a payment processor, Balanced is responsible for reporting 1099-K forms to the IRS and the payee under certain conditions. Most businesses are responsible for reporting non-employee compensation through the 1099-misc form. Here are the requirements for reporting 1099-misc:What is nonemployee compensation? If the following four conditions are met, you must generally report a payment as nonemployee compensation. You made the payment to someone who is not your employee; You made the payment for services in the course of your trade or business (including government agencies and nonprofit organizations); You made the payment to an individual, partnership, estate, or, in some cases, a corporation; and You made payments to the payee of at least $600 during the year. Instructions for Form 1099-MISC (2012) Here are the requirements for reporting 1099-K:Beginning in January, 2012, payment settlement entities (PSEs) are required by the Housing Assistance Tax Act of 2008 to report on Form 1099-K the following transactions: All payments made in settlement of payment card transactions (e.g., credit card); Payments in settlement of third party network transactions IF: Gross payments to a participating payee exceed $20,000; AND There are more than 200 transactions with the participating payee. New 1099-K Reporting Requirements for Payment Settlement Entities