Guide · Tax year 2026 · Updated October 23, 2026
Etsy 1099-K vs. what you earned: the walk to Schedule C Line 1
Your 1099-K is not your income. It reports what buyers paid for your orders through Etsy Payments, shipping included, before Etsy's fees and before refunds. You don't pay tax on that whole number, but you do have to show how you got from it to your real profit.
The walk · worked example
From the 1099-K to Schedule C
| 1a1099-K gross payments items $12,400 + shipping $1,600 | $14,000.00 |
|---|---|
| +Sales paid outside Etsy Payments craft fairs, cash, other platforms | $0.00 |
| 1Schedule C, Line 1: Gross receipts | $14,000.00 |
| 2Returns and allowances refunds to buyers | ($380.00) |
| 8Advertising Etsy Ads, Offsite Ads | ($640.00) |
| 10Commissions and fees transaction, processing, listing | ($1,560.00) |
| 27bOther: shipping labels | ($1,150.00) |
| Etsy profit before materials & other costs | $10,270.00 |
What the 1099-K counts
- Included: shipping. The IRS defines the gross amount "without regard to" fees, refunded amounts and shipping amounts, so shipping buyers paid stays in.
- Not subtracted: fees and refunds. Etsy's transaction, processing and listing fees, ads and refunds all come out later, on your Schedule C, not on the form.
- Excluded: sales tax Etsy remitted for you. Where Etsy collects and pays sales tax as the marketplace facilitator, that tax is left out of the 1099-K.
- Included: sales tax you collected yourself. If you applied tax with Etsy's sales tax tool and remit it yourself, Etsy counts it in the 1099-K.
Etsy says your 1099-K total equals the sum of the Gross column in its Etsy Payments Sales CSV. That export is the quickest way to check the form figure line by line.
The walk, step by step
- Start with gross sales including shipping. This should be close to the 1099-K Box 1a.
- Add sales you took outside Etsy Payments. The total is Schedule C Line 1, Gross receipts.
- Put refunds on Line 2, Returns and allowances. Don't net them out of Line 1.
- Put Etsy's charges below the line: transaction, processing and listing fees on Line 10; Etsy Ads and Offsite Ads on Line 8 (every statement row, line by line); shipping labels as an expense. ShopYear lists labels under Other expenses (Line 27b on the 2025 form); your preparer may place them elsewhere.
Where each number lives in Etsy
| Number | Etsy export | Where to download it |
|---|---|---|
| Fees, ads, shipping labels, refunds | Monthly statement CSV | Shop Manager → Finances → Monthly statements, one month at a time |
| Gross per order, shipping, discounts | Orders CSV | Settings → Options → Download Data |
| The exact 1099-K figure | Etsy Payments Sales CSV, Gross column | Settings → Options → Download Data, type "Etsy Payments Sales", whole year. Etsy's 1099-K help page explains this export |
Step by step, with the date ranges to pick: where to download every Etsy CSV for taxes.
Two details trip people up. On current statements, a Sale row carries no fees: each processing fee is its own Fee row. And a deposit's amount appears only in its title, for example "$15.34 sent to your bank account", not in the Amount column.
Will you get a 1099-K for 2026?
The federal threshold is back to more than $20,000 and more than 200 transactions for tax year 2026. Some states set lower thresholds, and Etsy lists these:
| Arkansas | $2,500 |
|---|---|
| DC, Maryland, Massachusetts, Vermont, Virginia | $600 |
| Illinois | $1,000 and 4 transactions |
| New Jersey | $1,000 |
With or without the form, you report the income.
Sources
- IRS, Instructions for Form 1099-K (rev. December 2026), Box 1a gross amount and reporting thresholds.
- IRS news release IR-2025-107 on the restored $20,000 and 200-transaction threshold.
- Etsy Help Center, 1099-K articles 360016389293 and 360000336447: what the form includes, sales tax, state thresholds and the Etsy Payments Sales export.
- Statement row shapes (Sale, Fee and deposit rows): public open-source Etsy statement parsers and their test fixtures, as recorded by ShopYear's format research.
This guide explains how Etsy's figures connect. It is not tax advice; check your return with your tax software or a tax professional.