eBay 1099-K in 2026: Who Gets One and What You Actually Owe

Short answer: for the 2025 tax year, eBay sends you a 1099-K only if you crossed $20,000 in gross sales AND 200 transactions federally, but your state may require one at $600 to $1,000. And whether or not the form shows up, profit from selling on eBay is taxable.

If you sell cards or anything else on eBay with any regularity, this is the form that eventually lands in your inbox and raises questions. Here is how it works in 2026, what changed, and the one misconception that costs resellers real money.

Disclaimer: We build bookkeeping software for resellers and breakers, not tax advice. We are not CPAs, and nothing here is tax, legal, or accounting advice. Rules change and depend on your situation, so confirm anything below with a qualified tax professional before you file.

What an eBay 1099-K is

A Form 1099-K is an information return that a payment processor files with the IRS, and copies to you, summarizing the gross payments it processed for you during the year. Since eBay runs its own managed payments, eBay itself issues the form, generally by January 31 for the prior tax year. You can usually download it from the payments section of your Seller Hub.

The key word is gross. The form adds up what buyers paid through the platform. It does not know what the items cost you, what eBay kept in fees, what you spent on shipping, or what got refunded.

The 2026 thresholds: federal rule restored, state rules still lower

For the 2025 tax year, filed in 2026, the federal threshold is back to more than $20,000 in gross payments AND more than 200 transactions, both conditions required. The American Rescue Plan Act of 2021 had scheduled a $600 threshold that caused years of confusion, but the One Big Beautiful Bill Act of 2025 repealed it and restored the long-standing rule.

That is not the end of the story, because states set their own thresholds and eBay follows them. New Jersey requires a 1099-K at $1,000 with no transaction minimum. Massachusetts, Vermont, Maryland, and Virginia use $600. A part-time seller who moves $1,500 of cards in New Jersey gets a form while a $15,000 seller in Texas does not.

The form is not the tax bill

The misconception worth killing: the 1099-K threshold decides whether a form is issued, not whether you owe tax. Made $5,000 of profit without crossing any threshold? Still taxable. Got a form because your state uses $600? It does not mean you suddenly owe more than you did before, it means the IRS now has the same gross number you do.

It cuts the other way too. The gross figure on the form is not your income. Say your 1099-K shows $25,000:

| Line | Amount | |---|---| | Gross payments (what the 1099-K shows) | $25,000 | | Cost of the cards and items you sold | ~$15,000 | | eBay fees (~13.6% effective on live sales) | ~$3,400 | | Shipping and supplies | ~$1,200 | | Actual profit you owe tax on | ~$5,400 |

Reporting the gross as income because the form says so, or panicking at a number that is 4x your real profit, are both versions of the same mistake: not knowing your own numbers. The fee math behind that ~13.6% is in our eBay Live fee calculator and the card breaking fees guide.

What eBay resellers can deduct

Operating as a business, you generally deduct the ordinary costs of selling against your gross, and pay tax on what is left:

• Cost of goods sold: what you paid for the cards, boxes, or inventory you sold. Almost always the biggest line.
• eBay fees: final value fees and payment processing come straight off every sale.
• Shipping and packaging to buyers.
• Other ordinary costs of running the operation, like supplies and software.

The catch is that every one of those deductions needs a record behind it. The IRS will happily take the gross number from the 1099-K; proving the smaller, true number is on you. The same rules apply across platforms, and the Whatnot version of this guide, including the hobby vs business distinction, is in the Whatnot taxes guide.

The fix is boring: track every sale as it happens

Resellers get hurt at tax time for one reason: reconstructing a year of sales, fees, product costs, and shipping in February is nearly impossible, so they either overpay on gross or guess and hope. The sellers who keep a per-sale record all year file off a number they can defend in an afternoon.

That per-sale record is exactly what BreakDesk produces: every sale minus fees, product cost, and shipping, totaled into a real P&L you can hand to your tax preparer. If you would rather not build the spreadsheet, join the waitlist.