The IRS form 1099-K is issued for all centers/in-homes who processed more than $20K and 200 ONLINE transactions in the given tax year. This form reports the total gross volume of online payment transactions made through brightwheel. Each program that meets these requirements will receive a 1099-K from brighthweel by January 31st.
This includes entities that are non-profit/tax except etc. The obligations are to issue 1099-K forms to all eligible US-based users who accept payments, independent of their business type. Even for tax-exempt entities, the 1099-K is for informational purposes only. We recommend consulting a tax advisor to learn more about this form and how you should use it.
Please Note: These requirements may vary by state see below for state specifics.
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Can Schools Access their 1099-K online?
No. 1099K forms are not accessible online. They will be mailed out in January to the address on file within the customer's school settings in brightwheel. Schools can request a digital 1099K copy if they have not received their paper copy in the mail after 1/31/2021.
To get the most accurate breakdown of all fees, refunds, adjustments, etc. schools/in-home centers should pull their billing transactions report for the entirety of 2020.
Do Multi Sites receive 1 or several 1099K’s?
1099 forms will be sent to each location separately. Brightwheel does not issue one form for an entire organization.
What is Stripe?
Stripe is the payment processor brightwheel utilizes to offer online payments.
What about parents?
Parents can pull their own tax reports from within their profiles.
There may be state requirements other than the Federal IRS that require the issuers of 1099K (brightwheel) to report to the state. Some customers may try to argue they are not required but state law may say otherwise:
There are currently 11 states (as of Oct 2020), that have 1099-K threshold reporting below the federal threshold: Arkansas, D.C., Florida, Illinois, Maryland, Massachusetts, Mississippi, Missouri, New Jersey, Pennsylvania, Vermont, Virginia and Maryland.
- Arkansas - Arkansas requires the form to be reported at $2,500 and eliminates the transaction count minimum.
- Florida - 1099-K returns will be due by the 30th day following the IRS due date and are required from payment settlement entities operating in Florida or with an address in Florida. Formerly a no-income tax state where there was no state 1099 reporting changed the law to require the 1099-K to be reported directly at the federal thresholds.
- Illinois - Beginning with 2020 and after, we will be required to submit those reports to Illinois electronically when four or more separate transactions that exceed $1,000 are reported.
- Massachusetts, Mississippi, Maryland, Vermont - Lowers the dollar amount to $600 or more in reportable payments.
- Missouri - Lowers the dollar amount to $1,200 or more in reportable payments.
- New Jersey - New Jersey requires the form to be reported $1,000 and eliminates the transaction count minimum.
- Virginia - We must report payments made to participating payees with a Virginia address if those payments are greater than or equal to $600. This change is effective July 1, 2020, applicable to payment transactions made on or after January 1, 2020 with reporting due in April 2021.
Our platform will have monthly reporting differences depending on how you look at the payments. On your platform, you will see the transactions on a 'created' basis, meaning as soon as a parent/customer pays, it will show up as a transaction. However, from a reporting perspective, it will be recorded on an 'available' basis, meaning it has passed through any approval/authorization before you can fully withdraw it or have it as part of your available payout balance. It is very similar to when you charge something on your personal credit card, it will show up in your credit card statement immediately as pending (created) but not posted to your statement account balance (available) until 2-3 business days later.
EX: Parents paid 12/29/2020 but did not post until 1/2/2021