Is gig work taxable?
Even if it’s part-time, temporary, or side work, the income you earn through an app or website for services like making deliveries, selling goods online, or driving for hire is typically taxable.
Employee versus independent contractor
If you are an employee, your employer should withhold Virginia income tax from your paycheck and submit that portion of your wages to us on your behalf. Or, if you’re an independent contractor, you may have to make estimated payments of income tax, typically on a quarterly basis. Either way, you’re required to report this income to us when filing your taxes.
Why am I receiving a Form 1099-K?
If you’ve received $600 or more in the previous calendar year from your gig work, you may receive a Form 1099-K from a third-party settlement organization (TPSO).
Form 1099-K reports the payment transactions those organizations process for platforms like electronic marketplaces, peer-to-peer payment companies, and other similar businesses. Please note, a payment reported on Form 1099-K is presumed to be taxable income, unless a specific exemption applies. Descriptions like the note attached to a service payment on a peer-to-peer app, for example, do not determine the taxability of that income. Please also note that income from gig work is generally taxable regardless of whether you received a Form 1099-K from a TPSO.
See Did You Receive a 1099-K? What You Need to Know for more information.
Questions?
Contact us at 804.367.8031 if you have questions.