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IRS reporting regulations on third-party payment transactions

Due to new Internal Revenue Service (IRS) regulations, Amazon has to obtain identifying information, such as a tax ID, from certain sellers on Amazon's US, and non-US websites. In general, the IRS regulations require us to collect identifying information from sellers who have a US address, US banking information, or other identifying information connecting the seller to the US. If the information you provide during the interview indicates you are a US taxpayer and have more than 200 transactions resulting in more than USD 20,000 in unadjusted gross sales, Amazon is also required to report Form 1099-K to the IRS.

IRS regulations require non-U.S. taxpayers to provide Form W-8BEN to Amazon in order to be exempt from U.S. tax reporting requirements.

Providing your taxpayer identification information to Amazon

To prepare for complying with these IRS regulations, Amazon e-mailed notifications to sellers who must provide tax identity information. Sellers who have a U.S. address, U.S. banking information, or other identifying information connecting the seller to the U.S. are required to provide taxpayer identification information within 30 days of receiving the e-mail notification.

You must provide your tax identity information if you received our notification, or if your seller account has a notification banner on this topic, even if the information that triggered the collection of the identifying information is changed or deleted at a later date.

IRS regulations require non-U.S. taxpayers to provide Form W-8BEN to Amazon in order to be exempt from U.S. tax reporting requirements. You can provide your information to Amazon by clicking here and using a self-service interview process that will guide you through entering your taxpayer information and validating your W-9 or W-8BEN form. In order to fulfil the IRS requirements as efficiently as possible, answer all questions and enter all information requested during the interview.

Avoid misspellings or entering incorrect Tax Identification Numbers, both of which can result in an invalidated tax form. Move forward or backward through the interview process at your own pace. Don't worry if you're not sure which form (W-9 or W-8BEN) applies to you. The answers you provide during the interview will automatically determine that for you. To help protect the security of your taxpayer identification information, please do not disclose it by e-mail or over the phone.

Help is available throughout the interview process, including links to IRS publications that support the IRS forms W-9 and W-8BEN.

See answers to frequently asked questions below, and learn more at the IRS website.

Important: Information in this document does not constitute tax, legal, or other professional advice and must not be used as such. To find out how this new legislation will affect your business, or if you have other questions, please contact your tax, legal, or other professional adviser.

Frequently asked questions

Regulations

Where can I learn more about the 1099-K and the 6050w regulations?

The regulations are under section 6050W of the Internal Revenue Code. Please see the IRS website for more information.

How do the regulations apply to Amazon sellers?

Sellers who have a U.S. address, U.S. banking information, or other identifying information connecting the seller to the U.S. are required to provide taxpayer identification information within 30 days of receiving the email notification. You must provide your tax identity information if you received our notification, or if your seller account has a notification banner on this topic, even if the information that triggered the collection of the identifying information is changed or deleted at a later date.

Enter your information now.

To help protect the security of your taxpayer identification information, we will not ask you to disclose it by e-mail or over the phone.

Do these regulations apply to non-profit organizations?

Yes, these regulations apply to both non-profit and for-profit organizations and entities.

What happens if I don't provide the required information?

If you have not provided valid tax identity information, your account will be considered in violation of our Amazon selling policies and your account will be suspended.

Tax identity collection & validation

I am a U.S. taxpayer. What information do I need to provide to Amazon?

By completing the tax interview in your account, you will be providing Amazon the appropriate tax identity in the form of a W-9 or W-8BEN form.

For U.S. taxpayers, a TIN is required by the IRS for the administration of tax laws. In most cases, your TIN is either an Employer Identification Number (EIN) or a Social Security Number (SSN).

Learn how to obtain an EIN at the IRS website.

I am a foreign seller and not a U.S. taxpayer. Do I need to provide any information to Amazon?

Yes, even if you are a non-US taxpayer, you still need to provide us information and the responses you give to the tax interview wizard questions will create the appropriate tax form on your behalf.

IRS regulations require non-U.S. taxpayers to provide Form W-8BEN to Amazon in order to be exempt from U.S. tax reporting requirements.

I am not going to come even close to hitting the reporting threshold. Why does Amazon require my tax identity?

Due to U.S. Internal Revenue Service (IRS) regulations, Amazon must obtain identifying information, such as tax identity, from certain sellers on Amazon's U.S. and non-U.S. websites. It is Amazon's policy to collect tax identify information from sellers who have a U.S. address, U.S. banking information, or other identifying information connecting the seller to the U.S., regardless of sales volume.

I've provided my tax identity. How long will it take to see if it is valid?

Validations can take up to three weeks to complete. After you update your tax identity information, the Legal Name section of your Account Info page will display "Provided and Pending Validation." If we find your information doesn't match IRS records, we will send you an e-mail with instructions on how to proceed.

I received an e-mail stating that my tax identity information is invalid. I thought I provided my correct information. Can you tell me why it came back invalid?

We don't know exactly why your tax identity information came back as invalid, but here are some things to consider:

  • If you are completing the tax identity information as an individual US taxpayer, use the information that appears on your Social Security card.
  • If you are completing the information as a business US taxpayer, use the name that appears on your CP575A notice from the IRS if you are providing a business name.
  • Misspelling your name, not including your middle initial or middle name, or entering an incorrect Tax Identification Number may cause tax identity information to not match to IRS records.

Reporting & document retrieval

Will I receive a Form 1099-K for my account?

For each calendar year, if you had at least $20,000 in unadjusted gross sales and more than 200 transactions, a Form 1099-K will be provided to you. If you did not meet both of these thresholds, you will not receive a Form 1099-K. We will track your unadjusted gross sales and number of transactions. You will also be able to tell if you have exceeded the thresholds by monitoring your unadjusted gross sales and number of transactions in your account.

When can I expect it?

We will mail a copy of your form by January 31 of the following year to the address provided by you in the tax interview. For more instructions on filling in Form 1099-K, please visit the IRS web site: http://www.irs.gov/pub/irs-pdf/i1099gi.pdf.

To update your address, access your seller account, from Settings, select Account Info and then click Edit in the Business Address section.

I did not receive my Form 1099-K in the mail. What address was it mailed to?

The Form 1099-K was sent to the address you provided in the tax interview. If you believe you should have received a Form 1099-K and didn't, please contact Seller Support.

Is the $20,000 calculated based on net sales or gross sales?

The $20,000 is calculated based on unadjusted gross sales. Unadjusted gross sales means the total sales, unadjusted for fees or refunds. It is the amount the buyer paid for an order even if the order is later refunded.

Why are sales tax and delivery charges included in my unadjusted gross sales amount?

Unadjusted gross sales equals the amount the buyer paid for the order and includes sales proceeds, sales tax, and gift-wrap and delivery charges.

Doesn't the gross sales amount change if I refund an order?

No. When you make a sale, the order total becomes a permanent part of your unadjusted gross sales for the year. Even if you later refund the entire amount a buyer paid for an order, the order total is still included in your unadjusted gross sales calculation. The IRS regulations require that no adjustments to gross transaction amounts be made. Please seek advice from a tax professional to understand the appropriate adjustments when preparing your tax return.

Here is an example that includes a discount to the buyer, an Amazon fee, and an eventual full refund to the buyer:

Item price USD: $100

Seller promotional discount USD: -$10 (subtracted before the gross sales amount is calculated)

Shipping charge USD: $15

Order total USD: $105 (gross sales amount)

Amazon fee USD: -$20 (subtracted after the gross sales amount is calculated)

The buyer is later refunded in full.

Buyer credit of the order total USD: -$105

Seller credit of the Amazon fee USD: $20

Net USD: $0

The gross sales amount for the purposes of calculating annual gross sales is USD $105, even after the refund.

If I have multiple seller accounts with the same tax identification number and they exceed the thresholds when the account totals are combined, will you file Form 1099-K for my combined seller accounts?

Yes. Unadjusted gross sales and transaction volumes will be consolidated for all accounts that have the same Tax Identification Number (TIN). You may receive more than one IRS Form 1099-K if you also have a selling account in the U.S., Japan, or Europe, or if you have multiple account types, for example, an Amazon Payments account and a Selling on Amazon account.

Please assist us by providing your taxpayer identification information in each of your seller accounts regardless of thresholds. This will help ensure that we report all accounts with the same TIN on Form 1099-K as required by the new regulations.

Are there instructions on how to use the 1099-K for my tax return?

To find out how this legislation and Form 1099-K affect your business, or if you have other questions, please contact your tax, legal, or other professional advisor.

For Individual filers, see these IRS instructions: http://www.irs.gov/pub/irs-pdf/i1040sc.pdf

For legal entity filers, see Form 1120: http://www.irs.gov/pub/irs-pdf/i1120.pdf

Can Amazon help me with my tax return?

While we are committed to helping sellers understand the requirements under these new tax regulations, we do not provide tax guidance. Please contact a tax professional.

I believe there is an error on the Form 1099-K I was issued. How do I get an updated Form 1099-K?

Please contact Seller Support by clicking the Contact Seller Support link at the bottom of any seller Help page, and provide the details of the issue.

1099-K form reconciliation

How do I find the transactional level details of my unadjusted gross sales for a specific year?

You can use the Date Range Reports page to generate individual transaction reports for a specific date range.

Note: Reports cannot be generated for dates prior to 1 January 2012. Custom date range reports are limited to 90 days. This data is produced in the local currency of the transaction and not in USD. Your form 1099-K is reported in USD. If you need additional reconciliation details, please contact Seller Support.

To generate a date range report, follow these steps:

  1. From Reports , select Payments.
  2. Select Date Range Reports.
  3. Click Generate a statement.
  4. In the Generate date range report pop-up box, proceed as follows:
    1. Select report type: Transaction
    2. Select reporting range: Month or Custom, and the specified date information
    3. Click Generate.
  5. Review your report in the list on the Date Range Reports page.
    Note: Reports can take up to 1 hour to generate. If you do not see your report in the list, check again later.
  6. Sort the type column by Order.
  7. To calculate unadjusted gross sales, add the amounts in these columns:
    • Product sales
    • shipping credits
    • Gift wrap credits
    • Promotional rebates
    • Sales tax collected

How do I find the summary level details of my unadjusted gross sales for a specific year?

You can use the Date Range Reports page to generate summary reports for a specific date range.

Note: Monthly reports cannot be generated for dates prior to January 2012. Custom date ranges are limited to 90 days and cannot be generated for dates prior to 1 January 2012. This data is produced in the local currency of the transaction and not in USD. Your form 1099-K is reported in USD. If you need additional details about this procedure, please contact Seller Support.

To generate a date range report, follow these steps:

  1. From the Reports menu, select Payments.
  2. Select Date Range Reports.
  3. Click Generate a statement.
  4. In the Generate date range report pop-up box, proceed as follows:
    1. Select report type: Summary
    2. Select reporting range: Month or Custom, and the specified date information
    3. Click Generate.
  5. Review your report in the list on the Date Range Reports page.
    Note: Reports can take up to 1 hour to generate. If you do not see your report in the list yet, check again later.
  6. To calculate unadjusted gross sales, add the amounts in the report columns listed in the two charts below:

    Income

    The Income section includes your sales, credits, and refunds.

    Line Item Description
    Seller fulfilled product sales The total amount of your product sales for seller-fulfilled products.
    FBA product sales The total amount of your product sales for Amazon-fulfilled products.
    shipping credits The amount paid by buyers for delivery.
    Gift wrap credits The amount paid by buyers for gift wrap.
    Promotional rebates The amount deducted from your account balance for promotional offerings.

    Sales Taxes

    The Sales Taxes section includes the taxes collected on product sales and services.

    Line Item Description
    Sales, shipping, and gift wrap tax The sales tax collected from buyers for product sales, shipping, and gift wrap. This amount may include deductions for promotional rebates.

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