Etsy 1099-K Threshold 2026: Does Etsy Send You a 1099?

Etsy sends a Form 1099-K to US sellers who exceed both federal thresholds in a calendar year: more than $20,000 in gross sales and more than 200 transactions. Both conditions must be met, not one. That threshold returned permanently under the One Big Beautiful Bill Act signed in July 2025, replacing the lower transitional figures used for 2024. Eight states set their own lower thresholds, so a seller in Maryland, Massachusetts, Vermont, Virginia or Washington DC can receive a 1099-K at $600 with no transaction minimum. Forms are available in your Etsy account by the end of January. Your Etsy income is taxable whether or not a form is issued.

Figures below reflect the federal rules and the state thresholds Etsy publishes as of August 2026. State lists change, so confirm yours against Etsy's current help page and your state revenue department. This is general information, not tax advice.

Does Etsy send you a 1099?

Only if you cross the reporting threshold. Etsy is a payment settlement entity, which means it is legally required to report what it paid you once you pass a certain volume, and legally not required to below it. For the federal threshold, you need both of these in the same calendar year:

• More than $20,000 in gross sales through Etsy Payments
• More than 200 separate transactions

A shop with $60,000 in sales across 150 orders does not trigger the federal requirement, because the transaction count is short. Neither does a shop with 900 orders totaling $18,000. This trips people up because the two-part test was widely reported as gone during the years when Congress kept trying to lower it to $600.

Here is the short version of that history, because it explains why so much of the advice you will find online contradicts itself:

The practical takeaway: any article telling you Etsy reports everything over $600 is describing a rule that was legislated but never fully took effect, and has since been repealed at the federal level.

Etsy 1099-K threshold by state

This is the part that catches small sellers, and it is the reason a shop doing $900 a year can still get a form. Several states require marketplaces to issue a 1099-K at thresholds far below the federal one, and Etsy complies with each. These are the state thresholds Etsy lists:

If you sell from one of these states, plan on receiving a 1099-K well before you would federally. That is not a bad thing. A form arriving means the IRS and your state already have a copy, which removes any question about whether the income needs reporting, and it forces the bookkeeping to happen in January rather than the week before the deadline.

Where to find your Etsy 1099

Etsy makes the form available in your account by the end of January for the prior tax year. Sign in and go to Shop Manager, then Finances, then Legal and tax information, where the downloadable 1099-K appears once issued. Etsy also mails a paper copy unless you opted for electronic delivery only.

Two things to check the moment it arrives. First, that the taxpayer name and TIN on the form match what you file under, because a mismatch triggers backup withholding on future payouts and it is far easier to fix in February than in April. Second, that the gross figure looks roughly like your gross sales, not your deposits. If it looks wildly wrong, download the annual CSV from your payment account and reconcile before assuming the form is at fault. It usually is not.

Why your 1099-K is higher than the money you received

This is the single most common source of panic, and it is not an error. Form 1099-K reports unadjusted gross payment volume. That means it counts the full amount buyers paid, before Etsy subtracted anything, and before you refunded anyone.

Everything below happens after the number on your 1099-K is set:

• $0.20 per listing, charged again every four months on renewal
• 6.5% transaction fee on the order total, including the shipping you charged
• Roughly 3% plus $0.25 in US payment processing
• 12% or 15% on Offsite Ads orders, which is mandatory above $10,000 in trailing sales
• Shipping labels you bought through Etsy
• Refunds, which do not reduce the reported gross

Stack those up and a shop that received $41,000 in deposits can easily show $52,000 on the form. The correct treatment is to report the gross as income on Schedule C and then deduct each of those fees as a business expense. You land on the same taxable profit either way, but only that version reconciles against the form the IRS is holding. Reporting your deposits as gross receipts is what generates the automated notice, and it is entirely avoidable.

The difficulty is that a bank feed cannot tell you the gross, because by the time money reaches your bank the deductions are invisible. That is a tracking problem rather than an accounting one, and we cover the tooling for it in our comparison of Etsy bookkeeping software, along with why QuickBooks has no native Etsy connection. If you would rather hand the whole thing to something that reads the 1099s and fills in the return for you, that is a reasonable route once your records are clean.

What if Etsy does not send you a 1099?

You still report the income. This is the point that costs sellers the most, because the absence of a form feels like permission. It is not. US tax law requires you to report income from selling goods regardless of whether any third party filed paperwork about it. The 1099-K is a reporting convenience for the IRS, not the definition of what counts as taxable.

What changes without a form is only the evidence trail. You will need your own records of gross sales and fees, which for Etsy means downloading the annual CSV from your payment account before you need it. Etsy keeps that data available, but a closed or suspended shop complicates access considerably, which is an argument for exporting every January whether or not a form arrives.

The one genuine exception worth knowing: if you are clearing out a closet and selling personal items for less than you originally paid, that is not business income and generally is not taxable, though you also cannot deduct the loss. The distinction is whether you are operating with the intent to profit. Someone reselling their own used furniture is in a different position from someone buying inventory to flip, and a shop making things to sell is plainly a business.

1099-K and 1099-NEC are not the same form

Etsy sellers occasionally receive both, and they report different things. The 1099-K covers payments settled through Etsy Payments, meaning your product sales. A 1099-NEC covers nonemployee compensation paid to you directly by a business, which for a maker usually means a wholesale account, a brand collaboration, or design work billed outside the marketplace.

Worth noting that the NEC threshold also moved. The same 2025 legislation raised the 1099-NEC and 1099-MISC filing threshold from $600 to $2,000 for payments made on or after January 1, 2026, indexed to inflation from 2027. So a $1,200 wholesale order that would have generated a form under the old rule may not generate one now. The income is still reportable.

If your money arrives from several places at once, which is normal for makers running Etsy alongside a Shopify store or a Patreon, the year-end assembly job gets meaningfully harder. Our multi-platform income tracker page covers that workflow, and the Etsy payout tracker page covers the single-channel version, including how Etsy's weekly Monday deposit schedule interacts with a December 31 cutoff.

A January routine that makes this painless

Four steps, once a year, and the whole thing stops being stressful:

1. Download the annual CSV from your Etsy payment account, whether or not a 1099-K was issued.
2. Total your gross sales for the calendar year and compare it against the form, if you got one. They should match closely.
3. Total each fee category separately: listing, transaction, processing, ads, shipping labels. These are your deductions.
4. Check the sales tax Etsy collected and remitted on your behalf. It passed through your account and is not your income.

That last one catches people. Etsy collects and remits sales tax under marketplace facilitator laws in every US state that has them, and that money appears in your payout data despite never being yours. Counting it as revenue overstates your income for no reason.

Do those four things in January while the year is still fresh, and whoever prepares your return spends an hour on it instead of billing you for a reconstruction. Published US fee guides put a self-employed return at $300 to $600 with clean records and $500 to $1,500 when the income is fragmented and the records are not, which is a real return on one afternoon of filing work.