Tax ID Validation Process

The Internal Revenue Service requires that “a payment settlement entity (PSE) must file Form 1099-K, Payment Card and Third Party Network Transactions, for payments made in settlement of reportable payment transactions for each calendar year.”

Worldpay issues 1099-Ks to e-commerce merchants, Payment Facilitators, and sub-merchants who are enabled for Dynamic Payout. Prior to issuing 1099-Ks, it is the responsibility of the Payment Facilitator to provide and validate sub-merchant Tax ID information to ensure that the validation process performed by Worldpay through IRS.gov is successful.

If the Tax ID validation fails, it is indicated in the Legal Entity Background Check Results panel of the PayFac Portal. You can also view the PayFac Tax Id Validation Report, available through the Scheduled Secure Report (SSR) service, to determine if a Legal Entity Tax ID Validation has failed. This report only applies to legal entities that have a sub-merchant funded through our platform, and is produced daily.

You can re-submit the sub-merchant request when certain Tax ID validation errors occur using the Edit button at the top of the View Sub-merchant page of the PayFac Portal to edit and re-submit Tax ID information.