eBay 1099-K: Thresholds and What Sellers Must Report

An eBay 1099-K is the form eBay sends to you and the IRS showing your gross sales payments for the year. Federally, eBay must issue one when you have more than $20,000 in payments and more than 200 transactions, but some states use lower thresholds, so you can receive one for much smaller amounts. Getting a 1099-K does not automatically mean you owe tax: personal items sold at a loss are not taxable, while profits from reselling and business sales are.

This guide explains the thresholds, what the number on the form includes, backup withholding, and exactly how to report personal sales and business sales, with worked examples. It is general information, not tax advice.

eBay 1099-K thresholds for 2025 and 2026

After several years of planned changes, the One Big Beautiful Bill Act of July 2025 permanently restored the federal 1099-K threshold for marketplaces and payment apps to more than $20,000 and more than 200 transactions. Both conditions must be met. eBay's 1099-K and tax withholding FAQ confirms this rule and lists states with lower thresholds.

Rule	Detail
Federal threshold	More than $20,000 in gross payments and more than 200 transactions
States with lower thresholds (per eBay)	Arkansas, District of Columbia, Illinois, Maryland, Massachusetts, Montana, New Jersey, Rhode Island, Vermont, Virginia
Accounts combined?	Yes, all accounts under the same SSN, ITIN or EIN
Amount reported	Gross payments; no deduction for fees, credits, discounts or refunds
Form availability	By January 31 for the prior year, electronically unless you opt for paper
Backup withholding	24% federal if no valid taxpayer ID or after an IRS B Notice

State thresholds change, so check your state revenue department each year. For background on how the federal threshold changed over time, see our guide to the 1099-K threshold.

Do you owe tax on eBay sales?

The form reports payments, not profit. Whether tax is due depends on what you sold:

Type of sale	Taxable?	Where to report
Personal item sold for less than you paid	No, but the loss is not deductible	Top of Schedule 1 (with offsetting adjustment) or Form 8949 and Schedule D
Personal item sold for more than you paid	Yes, the gain is a capital gain	Form 8949 and Schedule D
Inventory bought to resell	Yes, profit is business income	Schedule C, plus self-employment tax
Items you make and sell	Yes, profit is business income	Schedule C
Occasional sales without profit motive	Possibly hobby income	Schedule 1; hobby expenses are not deductible

The IRS page What to do with Form 1099-K says a loss on a personal item cannot be deducted, but you can avoid tax on the reported amount by reporting the payment at the top of Schedule 1 or reporting the loss on Form 8949. Whether you are a business or hobby seller matters a lot; our hobby vs business guide explains the IRS factors.

Worked example 1: clearing out personal items

This example is illustrative. Dana lives in Massachusetts, one of the states eBay lists with a lower threshold, and in 2026 sells 34 personal items: a used road bike, clothes, a camera and kitchen gear. Gross payments total $4,280.

Item group	Sale price	Original cost	Result
Road bike	$1,150	$2,400	Loss, not deductible, not taxable
Camera and lens	$1,380	$1,900	Loss, not deductible, not taxable
Clothes and kitchen items	$1,050	about $2,600	Loss, not taxable
Vintage jacket inherited from a parent	$700	Basis at inheritance about $200	About $500 gain, taxable
Total on 1099-K	$4,280

Dana reports the loss items so the $3,580 of loss-making sales is not taxed, and reports the jacket sale on Form 8949 and Schedule D as a capital gain. The key evidence is proof of original cost: old receipts, order history or a reasonable estimate backed by listings. Without it, the IRS may treat more of the $4,280 as taxable.

One edge case: collectibles such as coins, trading cards, art and antiques sold at a gain after being held for more than a year can be taxed at a maximum federal rate of 28% rather than the usual long-term capital gains rates. If you sell valuable collections, ask a tax professional how the gain should be calculated and keep appraisal or purchase records.

Worked example 2: a part-time reseller

This example is illustrative. Marcus buys clothing at thrift stores and resells it on eBay. In 2026 he has 640 sales and $31,500 in gross payments, so he receives a federal 1099-K.

Item	Amount
Gross payments (1099-K)	$31,500
Refunds to buyers	-$900
Cost of goods sold (thrift purchases for items sold)	-$8,400
eBay final value and ad fees	-$4,350
Shipping labels	-$5,200
Packaging and supplies	-$610
Mileage to thrift stores (1,800 business miles, mixed 2026 rates, about)	-$1,330
Net profit (Schedule C)	$10,710
Self-employment tax ($10,710 x 92.35% x 15.3%)	$1,513.27

The form says $31,500, but Marcus's taxable profit is about a third of that. A reseller who reports the 1099-K figure with no expenses would overpay by thousands. Our self-employed tax deductions guide lists more costs resellers can claim.

Step by step: handling your eBay 1099-K

1. Download the form from your eBay account after it is issued by January 31.
2. Download eBay's transaction and payout reports for the same year.
3. Reconcile: gross payments minus refunds, fees and shipping should roughly match your deposits.
4. Split personal and business sales if you have both.
5. Gather cost records: purchase receipts for inventory, and evidence of original cost for personal items.
6. Report business sales on Schedule C and personal sales on Schedule 1 or Form 8949 and Schedule D.
7. Check Box 4 for any backup withholding and claim it as a payment on your return.
8. If the form is wrong, contact eBay for a correction, keep the correspondence, and file on time anyway.

What if you received an eBay 1099-K in error?

Sometimes the form is simply wrong: it includes sales from an account that is not yours, payments that were fully refunded, or a period after you sold the business. The IRS advice is to contact the filer named in the top-left corner of the form and ask for a corrected 1099-K, keep the original and all correspondence, and not wait to file. If the correction does not arrive in time, report the amount as shown and make an adjustment on your return with an explanation, supported by your records. Do not just leave the form off; the IRS already has a copy and a missing amount can trigger a mismatch notice.

Reporting business sales on Schedule C

For resellers, the 1099-K gross figure goes into gross receipts on Schedule C. Refunds and returns are subtracted as returns and allowances, cost of goods sold is calculated in Part III using opening inventory, purchases and closing inventory, and eBay fees and shipping are listed as expenses. If you sell on several marketplaces, report all of them in the same business, and keep a summary showing each platform's 1099-K total so a reviewer can see that everything reconciles.

Backup withholding and taxpayer IDs

eBay requires a nine-digit SSN, ITIN or EIN for each account. If you do not provide a valid number, eBay withholds 24% of gross payments for federal backup withholding, and states such as California, Maine and Vermont have their own withholding rules. Withholding is taken from the gross payment, and eBay cannot refund it even if the buyer later returns the item; you recover it as a credit on your tax return. Business sellers should enter the business's legal name and EIN rather than personal details; see EIN vs SSN.

Sales tax on eBay sales

eBay collects and remits sales tax on most US orders as a marketplace facilitator, so individual sellers usually do not collect sales tax on eBay sales themselves. That changes if you also sell through your own website or in person, where your own sales tax nexus rules apply. Sales tax eBay collected from buyers is not your income.

Common eBay 1099-K mistakes

• Reporting the 1099-K total as profit and ignoring costs and fees.
• Ignoring a 1099-K for personal items. The IRS has a copy; report it with the offset so it does not trigger a mismatch notice.
• Splitting sales across accounts to dodge the threshold. eBay combines them.
• No cost records. Resellers need purchase receipts; a spreadsheet updated weekly is enough.
• Assuming no form means no tax. Profit is taxable whether or not you get a 1099-K.

Selling beyond eBay

Resellers who grow often add direct sales to repeat buyers, local businesses or wholesale customers. Those sales need your own invoices, both for the customer and for your records, since no marketplace report backs them up. Our guide to 1099 forms explains how platform and direct income are reported, and the new guide to starting a print on demand business covers another popular way sellers expand.

For direct and wholesale orders, create invoices with our free invoice generator: no sign-up, list items and shipping, add sales tax where it applies, and download each invoice as a PDF.