Form 1099-K Overview and FAQs

Form 1099-K Overview and Frequently Asked Questions

 

About 1099-Ks

Reading your 1099-K

Reconciling Your Financials

Changes and updates


About 1099-Ks

Why does Grubhub send 1099-Ks?

Since Grubhub receives funds from customers and transmits these funds to your restaurant, the IRS considers Grubhub a Third Party Settlement Organization (TPSO). As stated by the IRS, “Every PSE or other party which submits instructions to transfer funds to the account of a participating merchant, in settlement of reportable payment transactions, must file an information return (Form 1099-K) with respect to each participating payee for that calendar year.”

Why am I getting a 1099-K?

The IRS requires that a Third Party Settlement Organization (TPSO) provide a 1099-K to a payee if, for the calendar year:

  • The gross amount of total reportable payment transactions exceeds $20,000, and
  • The total number of reportable transactions exceeds 200.

See Box 1a. Gross Payment Card/Third Party Network Transactions for more detail. 1099-K forms are aggregated and sent by taxpayer ID, for each taxpayer ID that meets the requirements outlined by IRS.

If you have multiple restaurant locations associated with the same taxpayer ID, you will receive one 1099-K that aggregates the amounts for all those restaurants. If each restaurant location is associated with a different taxpayer ID, you will receive a separate 1099-K for each taxpayer ID Grubhub has on file that meets the requirements outlined by the IRS.

Will I receive a separate 1099-K form for each of my restaurant locations?

1099-K forms are aggregated and sent by taxpayer ID, for each taxpayer ID that meets the requirements outlined by IRS. If you have multiple restaurant locations associated with the same taxpayer ID, you will receive one 1099-K that aggregates the amounts for all those restaurants. If each restaurant location is associated with a different taxpayer ID, you will receive a separate 1099-K for each taxpayer ID Grubhub has on file that meets the requirements outlined by the IRS.

Where can I view my 1099-K?

The 1099-K is mailed to the address on file for your restaurant. If you have not received a copy in the mail or have misplaced it, please email [email protected], and we will be happy to send you a secure, password-protected email with a PDF of your 1099-K.

Please check your spam or junk folder for an email from Tax1099.com, if you do not receive an email within two business days of your request.

How do I view my statements online?

You can view your statements online via our restaurant platform, Grubhub for Restaurants. Log in today or request an account if you don’t have an account. Click here to learn how to download your statements.


Reading your 1099-K

What is a reportable payment transaction?

Any third party network transaction where the TPSO (i.e. Grubhub) submits instructions for a bank to transfer funds to the account of a participating payee (i.e. your restaurant). This is regardless of whether Grubhub received the payment via credit card, PayPal, cash, gift card, corporate line of credit, or other means. Click here for more details.

Why does the amount reported in the 1099-K include Grubhub’s commission rate?

As stated by the IRS “Gross amount means the total dollar amount of total reportable payment transactions for each participating payee without regard to any adjustments for credits, cash equivalents, discount amounts, fees, refunded amounts, or any other amounts” (See Box 1b. Card Not Present Transactions).

For a clear example of this presented by the IRS, please see IRS Regulation 1.6050W-1 (e) Example 5. Gross Amount (bottom right of page 423, and continued at top left of page 424).

What is the 1099-K Box 4 Federal Income Tax Withholdings?

In October or November of each year, the IRS sends Grubhub a CP2100 notice stating that certain 1099-Ks provided for the prior year had taxpayer name and number combinations that did not match their records.

We are required to send the listed taxpayers B-Notice letters to obtain a W9 and immediately start withholding 28% of all funds due. This withholding occurs until we receive the updated W9, and the withholding is paid to the IRS each month. It is then reflected in Box 4 of the 1099-K.

Before starting this withholding, we send several notifications via direct mail, fax, email, and phone.


Reconciling Your Financials

How do I reconcile my statements with what’s reported on my 1099-K?

Download all your Grubhub statements from Grubhub for Restaurants, our restaurant management platform.

The 2017 Grubhub Holdings Inc 1099-Ks will reflect all affiliates except Eat24. Please add the Total Order Value, before fees, from your from Seamless, ROTR, DiningIn, Delivered Dish, LA Bite, Grubhub for Work, Foodler (post-acquisition only) and OrderUp (27 purchased markets post-acquisition data only).

If you have multiple restaurants using the same taxpayer name and number, combine the information for each restaurant that shares the same taxpayer name and number, as the IRS requires that Grubhub file one form per taxpayer.

My 1099-K does not match with my statements. What should I do?

Please email [email protected], and provide specific details as to the numbers you are seeing on your statements vs the numbers reported on your 1099-K. We will research the issue, and if an error does exist, we will provide a revised form. Otherwise, we will let you know why there is a difference between the numbers you are finding and our 1099-K calculation.


Changes and Updates

The restaurant’s ownership changed mid-way through the year, but my 1099-K is showing data for the entire year. How do I get this fixed?

Please send an updated W9 to [email protected] along with the date the ownership change took effect and evidence of this ownership change date. We will review your W9, ownership change evidence, and the 1099-K that we sent. If the IRS’s $20,000 threshold was reached in that partial year, we will issue you a revised 1099-K. If the gross reportable transactions were less than $20,000 in that partial year, we will zero out the form.

Once the revised form is available, we will send you a secure password protected email with a PDF of your 1099. As we receive many 1099 questions this time of year, please allow three business days for the email of the updated form.

Why was the “corrected” box at the top of the form unmarked, even though the information on my 1099-K was corrected?

The IRS requires that we mail 1099Ks to payees by January 31, 2018. However, since we file with the IRS electronically, the IRS does not require the forms to be filed until the first day of April. Any changes made before we file with the IRS are simply edits/revisions to the form. Any changes made after we file will require that we provide you with a “Corrected” form and file this “Corrected” form with the IRS.

Can I get a reissue of my 1099-K?

If you have not received a copy in the mail or misplaced it, please email [email protected], and we will be happy to send you a secure password protected email with a PDF of your 1099-K. The email will come directly from our service provider, Tax1099.com. 

Please check your spam or junk folder if you do not receive an email within two business days of your request.

How do I updated my taxpayer name and ID for my 1099-K?

Please send an updated W9 to [email protected]. We will review the W9 and update your 1099-K. Once the revised form is available, we will send you a secure, password-protected email with a PDF of your 1099-K.

As we receive many 1099-K questions, especially during tax season, please allow three business days for an updated form.

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