Form 1099-K Communication Timeline
Ahead of the 2025 tax season, Dwolla will be communicating with the end users of our clients who meet the updated criteria for a Form 1099-K for tax year 2024. Form 1099-K is a tax form that is used to report transactions taking place within payment networks to improve tax compliance.
Dwolla is required to issue 1099-K forms to participants in the Dwolla Network (meaning our clients and their customers) who received payments for goods and services exceeding certain federal or state reporting thresholds. For the 2024 tax year, the federal reporting threshold is $5,000 with no minimum number of transactions. Because Dwolla does not maintain sufficient information to file such reports on all eligible customers, Dwolla will need to obtain the information via a W-9 from eligible customers.
The flow chart below outlines the different emails these customers will receive and when to expect them.
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Form 1099-K Eligibility Email
Who will receive this email? Any of your customers who are eligible for a Form 1099-K, meaning the customer is a verified or unverified customer who has received more than $5,000 in payments on the Dwolla Platform in 2024.
When will this email be sent? The Thursday after the customer meets the criteria described above to be eligible for a Form 1099-K.
Email Objective: To explain that your customer’s account is eligible for a Form 1099-K for the 2024 tax year and to notify the customer of Dwolla’s terms and privacy policy that allow for electronic delivery of this important tax form.
Email Content
Subject Line: Notice of IRS Tax Form Eligibility
As a customer of [Client Name], your transfers on that platform are performed through your Dwolla account. Dwolla is required to report transactions received by users in its network to the IRS in a Form 1099-K if any single user receives more than $5,000 in payments in the 2024 tax year. Dwolla is also required to report transactions received by users in its network to their state tax authority in a Form 1099-K if the payments received by those users exceed their state threshold.
Dwolla has determined that your payment receipts with [Client Name] exceed the federal threshold and/or the threshold for your state and, as such, we will need to file a Form 1099-K. Again this year, we will be delivering Form 1099-K and collecting information electronically. For more information about how we collect and use your information, please see our terms of service and our privacy policy.
If you have questions about this process, please contact [Client Name] or see our Frequently Asked Questions.
Form W-9 Request Email - Insufficient Information
Who will receive this email? Your 1099-K eligible customers who need to provide more information so we can produce their Form 1099-K
When will this email be sent? The Friday after they receive their Form 1099-K Eligibility Email.
Email Objective: This email asks your customers to fill out a Form W-9 so we have all the information we need to produce their Form 1099-K. Some 1099-K eligible customers already have this information on file so won’t receive this email.
Customers who don’t respond by filling out the Form W-9 will receive a reminder every Monday after the original request until they complete and submit it.
Once customers fill out the Form W-9, Dwolla will have the information necessary to produce their Form 1099-K. The customer won’t receive another email from us until we announce their Form 1099-K is available.
Email Content
Subject Line: Action Needed: W-9 Request
Each year, Dwolla submits a Form 1099-K to the IRS for any user whose payment volume exceeds the federal threshold. As a customer of [Client Name], your transfers on that platform are performed through your Dwolla account, and are reported by Dwolla in your 1099-K.
Dwolla has determined that your payment receipts with [Client Name] must be reported in a Form 1099-K this year. Please fill out the provided Form W-9 so that we can provide the correct identifying information on your Form 1099-K. You are required by law to provide this information. If we do not receive the Form W-9 within 30 days of this notice, Dwolla will be required to suspend your account and you will not be able to initiate transfers with [Client Name].
Note: Dwolla is collecting your Form W-9 through the link provided in this email. Please do not email us a PDF copy of your Form W-9.
Form W-9 Request Email - TIN Mismatch
Who will receive this email? Your 1099-K eligible customers whose information has been submitted to the IRS TIN matching system and returned an error instead of a confirmation.
When will this email be sent? The Friday after the IRS TIN matching system returns an error for one of your 1099-K eligible customers
Email Objective: This email asks your customers to fill out a Form W-9 if we submitted their information to the IRS TIN matching system and received an error.
Customers who don’t respond by filling out the Form W-9 will receive a reminder every Monday after the original request until they complete and submit it.
Once customers fill out the Form W-9, Dwolla will submit their information to the IRS. If the information matches, the customer won’t receive another email from Dwolla until their Form 1099-K is available. If Dwolla still receives a mismatch error from the IRS, customers will receive another Form W-9 Request email from us and need to fill out another Form W-9.
Email Content
Subject Line: Action Needed: W-9 Request
We were recently notified by the IRS of a mismatch between the name and Taxpayer Identification Number (TIN) that you have on file with Dwolla. Each year, Dwolla submits a Form 1099-K to the IRS for any user whose payment volume exceeds the federal threshold. As a customer of [Client Name], your transfers on that platform are performed through your Dwolla account, and are reported by Dwolla in your 1099-K.
Dwolla attempted to verify your name and TIN that you provided when creating your account with [Client Name] using the IRS verification service and received an error. Your TIN may be a Social Security Number (SSN) or Employer Identification Number (EIN) and the name may be your legal name or a business name. Because the IRS has identified a potential mismatch, we require you to fill out the provided Form W-9 so that we can ensure that information is correct in our records. If we do not receive the Form W-9 within 30 days of this notice, we will be required to suspend your account and you will not be able to initiate transfers with [Client Name].
Note: Dwolla is collecting your Form W-9 through the link provided in this email. Please do not email us a PDF copy of your Form W-9.
Form 1099-K Available Email
Who will receive this email? Your customers with a Form 1099-K
When will this email be sent? When the customer’s Form 1099-K becomes available in January each year.
Email Objective: This email tells your customers they can access and download their Form 1099-K. It provides the link to Dwolla’s 1099-K portal, which they log into by entering the last four digits of their SSN or EIN.
Email Content
Subject Line: NOTICE - IMPORTANT TAX RETURN DOCUMENT AVAILABLE
IMPORTANT TAX RETURN DOCUMENT AVAILABLE
As we notified you in previous emails, Dwolla must file a Form 1099-K related to your payment receipts through the Dwolla network on [Client Name] application.
You can download and print this form now through our 1099-K portal. To log into the portal and verify your identity, enter your {lastFourSSN or lastFourEIN}. Once you log in, you will be able to view, download and print your Form 1099-K.{Button that links to 1099-K portal}
Form 1099-Ks are provided to the IRS to report certain payments that are sent or received from third-party settlement organizations.
A Form 1099-K is an information return only, and the gross payments reported on a Form 1099-K do not necessarily represent reportable income. The form should be used in conjunction with other tax records such as bank statements, invoices, etc. to determine the taxable income, if any. Please consult your tax advisor to determine your tax reporting requirements.
If you have received a Form 1099-K, it is based on your activity with [Client Name] that uses the Dwolla Platform to handle their payments.
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For more information on what 1099-K forms are and who must file, please see our blog.