What Are Taxpayer Identities and How Are They Used for 1099-K Reporting?

Tanner C.
  • Updated

A taxpayer identity represents the legal person or entity that owns a bank account in your Hemlane account. This can be an individual using a Social Security number or a business entity using an Employer Identification Number.

 

Why Does Hemlane Use Taxpayer Identities?

Hemlane must issue a 1099-K form when a payout bank account meets the Internal Revenue Service reporting thresholds for the year. For tax year 2025, Hemlane issues a 1099-K only when both of the following are true for a single bank account:

  1. At least 200 qualifying transactions were processed
  2. Gross payment volume reached at least $20,000

The IRS applies these requirements at the bank account level. Taxpayer identities allow Hemlane to:

  1. Match each bank account to the correct legal taxpayer
  2. Issue a 1099-K form under the right name and tax identification number
  3. Separate reporting when you use different legal entities for different properties

If a bank account does not meet both thresholds, Hemlane does not issue a 1099-K for that account.

 

How Do I Set Up Taxpayer Identities in Hemlane?

Step 1: Go to your Banks and Cards page by selecting your name in the top right corner and choosing Banks and Cards.

Step 2: On that page, look for the sentence “To manage your taxpayer identities, click here.” Click here to open the taxpayer identity screen.

Step 3: Click the Add Taxpayer Identity button. You will create one identity for each person or business that owns a payout bank account. You will then match each identity to the bank account it belongs to.

Step 4: When the form opens, enter the following:

  • The name of the person or business
  • Their SSN, EIN, or TIN
  • Their current mailing address

Then choose which bank accounts belong to this taxpayer. Each bank account can have only one taxpayer.

Step 5: Save the form. Any bank accounts you assigned to that identity will disappear from the Unassigned Bank Accounts list.

If you ever need to fix something, you can edit or delete a taxpayer identity. Any bank accounts linked to it will return to the Unassigned Bank Accounts list so you can reassign them correctly.

Keywords: taxpayer identity Hemlane, 1099-K taxpayer identity setup, add taxpayer identity bank account

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