Level 2

I received an interesting question from a farmer's market on tax compliance.

"The farmer's market received a 1099-K from Square, and I believe that the Market should be sending out 1099-NEC forms to all the providers that earned over $600 in 2020.  In past years, customers paid the producers directly because the market was "in-person", but in 2020 the customers have pre-paid for their orders through Square.  Square then pays the Market and the Market writes checks to the producers.  Does the market need to issue 1099-NEC forms or are we exempt because we are a tax-exempt cooperative?"

Any ideas regarding this question would be greatly appreciated!  

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