Overview
Under IRS regulations, only businesses operating as Payment Settlement Entities (PSEs) or Third-Party Settlement Organizations (TPSOs) must file Form 1099-K for each payee that meets certain thresholds.
Whether a platform is a PSE/TPSO depends on how it contracts with the parties and whether it’s responsible for “settling” funds on their behalf.
eRentPayment’s Role
Third-Party Sender Model:
eRentPayment had a direct relationship with Esquire Bank to initiate ACH transfers for rent payments. Although funds did move through an eRentPayment-controlled account at Esquire (rather than tenant-to-landlord “direct”), eRentPayment was not acting as an aggregator that contracted to settle or hold the funds as a full Payment Settlement Entity.
Brief Pass-Through, Not Full Settlement:
The account at Esquire served as a pass-through conduit. eRentPayment did not hold tenant funds in a manner that gave it full control or dominion (the hallmark of a TPSO). Instead, the bank remitted those funds to landlords per eRentPayment’s instructions under the ACH agreement.
RentRedi’s Role
Payment Settlement Entity:
By contrast, RentRedi operates more fully as a TPSO/PSE. It is contractually responsible for settling payments—both credit card and ACH—to landlords. This structure does place it under the 1099-K filing requirement.
Key Takeaways
eRentPayment: Despite having a pass-through account, eRentPayment was not the “Settlement Entity” under IRS rules—it merely facilitated ACH transfers via its bank relationship. Therefore, it was not obligated to file Form 1099-K.
RentRedi: Acts as a settlement organization and does file Form 1099-K when the IRS threshold is met.
If you used eRentPayment, you can rely on your transaction records and account statements for tax reporting. If you used RentRedi and met the IRS thresholds, you would receive a 1099-K directly from RentRedi.