TAX BULLETIN 20-10 - Virginia Department of Taxation - October 30, 2020 - Important Information Regarding Reporting Requirements for Payment Settlement Entities

Sep 19, 2026

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The Virginia Department of Taxation outlines new reporting requirements for payment settlement entities required to file Form 1099-K with the IRS. Under Virginia law, these entities generally must submit duplicates to the Department for participating payees with Virginia state addresses or who are Virginia taxpayers, effective for transactions on or after January 1, 2020. Third-party settlement organizations face Virginia-specific thresholds tied to federal Form 1099-MISC rules, potentially requiring filings even when IRS filing is not required. The bulletin also specifies electronic reporting methods and key 2021 deadlines aligned to federal deadlines.

LanguageEnglish

CategoryGeneral

FormatPDF

Pages4

Reading Time2 min

AccessFree to download

Reporting Requirement for 1099-K Filers

What entities must file and what must be duplicated

Participating payee definition and effective date

Reporting Threshold for Third-Party Settlement Organizations

Virginia thresholds and potential expanded filing

Reporting Methods and Deadlines

Electronic filing and mail requirements

2021 submission deadlines for 2020 transactions

| | TAX BULLETIN 20-10
Virginia Department of Taxation
October 30, 2020 | | --- | --- | | IMPORTANT INFORMATION REGARDING REPORTING REQUIREMENTS FOR PAYMENT SETTLEMENT ENTITIES
REPORTING REQUIREMENTS FOR FORM 1099-K FILERS WITH VIRGINIA PARTICIPATING PAYEES | | Federal law requires payment settlement entities to submit Form 1099-K to the Internal Revenue Service (“IRS”) reporting certain information related to payment card transactions and third party network transactions. Pursuant to Item 282 Y of the 2020 Appropriation Act (House Bill 30, Chapter 1289), payment settlement entities that are required to submit Form 1099-K to IRS must now generally submit duplicates of such forms to the Department of Taxation (“the Department”). In addition, under this Act, House Bill 730 (Chapter 248 of the 2020 Acts of Assembly), and Senate Bill 211 (Chapter 63 of the 2020 Acts of Assembly), third-party settlement organizations must submit Form 1099-K information to the Department and certain participating payees using the de minimis thresholds imposed for purposes of federal Form 1099-MISC. This bulletin provides additional information regarding these Virginiaspecific reporting requirements. Reporting Requirement for 1099-K Filers Under federal law, a bank or other organization that enrolls a business to accept payment cards and contracts with the business to make payment on such card transactions is required to file Form 1099-K reporting the business’s payment card transactions for each calendar year and to provide a copy of Form 1099-K to the business . Similarly, third party settlement organizations are generally required to file Form 1099-K reporting certain information related to third party network transactions . Pursuant to Item 282 Y of the 2020 Appropriation Act, a copy of Form 1099-K must now also be provided to the Department . Specifically, Internal Revenue Code (“IRC”) § 6050W requires payment settlement entities to annually submit Form 1099-K to the IRS for payments made in settlement of reportable payment transactions . For purposes of this requirement, “payment settlement entity” means: • In the case of a payment card transaction, the merchant acquiring entity (defined as the bank or other organization which has the contractual obligation to make payment to participating payees in settlement of payment card transactions ) ; and • In the case of a third party network transaction, the third party settlement organization (defined as the central organization which has the contractual obligation to make payment to participating payees of third party network transactions) . Virginia law now requires that a payment settlement entity submit to the Department either (1) a duplicate of each Form 1099-K that it submits to the IRS or (2) a duplicate of each Form 1099-K that it submits to the IRS related to a participating payee with a Virginia state address or that is a Virginia taxpayer. Under federal law, a participating payee is defined as follows: • In the case of a payment card transaction, any person who accepts a payment card as payment, and • In the case of a third party network transaction, any person who accepts payment from a third party settlement organization in settlement of that transaction. This Virginia filing requirement applies to reportable payment transactions made on or after January 1, 2020. Reporting Threshold for Third-Party Settlement Organizations Under IRC § 6050W(e), third party settlement organizations are required to submit Form 1099-K with respect to third party network transactions of a participating payee, if for the calendar year, reportable payment transactions with the participating payee exceed $20,000, and the total number of transactions with the participating payee exceeds 200. For Virginia purposes, third-party settlement organizations must now report to the Department, and to any participating payee, all information required to be reported for federal tax p

FAQs

Which payment settlement entities must submit Form 1099-K information to Virginia?

Payment settlement entities required to file Form 1099-K with the IRS must also generally submit duplicate Form 1099-K information to the Virginia Department of Taxation under Virginia law.

How does Virginia define a participating payee?

A participating payee includes, for payment card transactions, any person who accepts a payment card as payment, and for third-party network transactions, any person who accepts payment from a third-party settlement organization in settlement of the transaction.

What reporting thresholds apply to third-party settlement organizations for Virginia tax purposes?

For Virginia purposes, third-party settlement organizations must use thresholds imposed for federal Form 1099-MISC, meaning they submit Form 1099-K information to the extent they make payments of $600 or more to another person who is not an employee, subject to the Virginia-mailing-address requirement.

Sep 19, 2026

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