1099-K
The 1099-K has been a big change to the credit card processing industry. Many processors have started assessing extra fees to process the form for their merchants. IMS is absorbing the extra cost for processing the 1099-K for our merchants, but we are offering a new product to assist merchants in filing their taxes correctly.
This came from a new tax requirement that was created to report credit card processing in 2008. Specifically, the Housing Assistance Tax Act of 2008 created Section 6050 W of the Internal Revenue Code. Starting in 2011, merchants are required to provide their tax identification number (TIN) and tax filing name to their merchant acquirer. This information is then used to file a 1099-K form with the IRS and to provide a copy of the 1099-K to the merchant. If the TIN is not reported, is incorrectly reported, or the TIN does not match the legal name, the IRS will notify the acquirer and require the acquirer to withhold tax on funding. This hold would be at 28% and start in 2013.
IMS will be providing the 1099-K to all of our merchants free of cost. It will be mailed to you at the end of the year. The 1099-K contains your gross annual processing amount and gross processing each month.
Starting in February of 2012, IMS will start to offer our Regulatory Account Assistance Program (RAAP). This program will add the reporting of the 1099-K to a merchant’s online portal, making it available at any time. 1099-K forms from previous years will also be available. In addition, the RAAP online program will supply merchant with their net amount of processing, this is useful in properly filing taxes, and a reconciliation tool. The program is optional and costs $50.00 per year. If you are interested in enrolling in the program please call us at 800-689-0543.