This article is intended to create awareness around the Internal Revenue Service (IRS) Form 1099-K and provide answers to some frequently asked questions.
For transactions on vRxPro®, Covetrus® is the merchant of record. As such, Covetrus meets the IRS definition of a Payment Settlement Entity (an entity that makes payment in settlement of third-party network transactions).
Transactions processed over vRxPro qualify as third party network transactions. Therefore, Covetrus's subsidiary, Covetrus North America LLC, and its corporate parent entity, WA Butler Company, are required to issue 1099-Ks to practices utilizing vRxPro.
Form 1099-K is an informational report required by the Internal Revenue Service to document payments the practice received during the year from either:
- Credit, debit or stored value cards such as gift cards (payment cards)
- Payment apps or online marketplaces (third-party payment networks)
Transactions processed through vRxPro fall under the second requirement as Covetrus is operating an online marketplace.
Note: Covetrus does not provide professional tax or accounting guidance. Please speak to a qualified tax professional if you are seeking advice about your specific business or tax circumstances.
>> Jump to: Frequently Asked Questions
Review the following items for awareness:
- The thresholds for issuance of 1099-K's are where gross payments exceed $20,000 AND transaction count exceeds 200 in 2025. Practices with vRxPro activity falling under these thresholds WILL NOT receive a 1099-K related to activity on vRxPro.
- Form 1099-K will be sent via US Mail to the address of the practice on file with Covetrus. The mailing will be completed prior to the January 31st deadline.
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If your practice also changed payment models during the year (e.g. monthly payout to daily payout) and/or accepts payments via American Express (AMEX), the practice may receive additional 1099's for each of the following:
- Initial payment model (e.g. daily deposit and withdrawal)
- New payment model (e.g. monthly net deposit)
- Payments accepted via American Express
- vRxPro
- 1099-K's will be issued by the filer/payer WA Butler Company / Covetrus North America, LLC.
Interpretting and utilizing Form 1099-K
Example 1099-K:
Key fields and definitions:
| Box on Form 1099-K | Description |
| Filer's Name | WA Butler Company is the corporate parent of Covetrus North America, LLC, the entity that operates vRxPro. Covetrus is required to list the corporate parent entity in the "Filer" box of the 1099-K along with Covetrus North America, LLC. |
| Payee's TIN |
This box contains either:
|
| Payee's Name |
This should be either:
|
| 1a Gross amount of payment card/third party network transactions | This box contains the gross amount collected from pet owners before any deductions for discounts, fees, refunds, rebates, etc. It will tie to the following from the summary page of the excel version of the Monthly Transaction Detail report: product revenue + handling fee+shipping+fulfillment fee+total tax. |
| 1b Card Not Present transactions | The amount in this box will tie to the amount in Box 1a. All transactions in vRxPro are considered "Card Not Present" transactions. |
| 4 Federal income tax withheld |
In some cases, when the legal entity name and/or Federal Employer Identification number provided by the practice are not correct, Covetrus is required to make "Backup Withholding" deductions from the amounts paid to practices. These withholdings are at the mandatory rate of 24%. If you see federal income tax withheld on your 1099-K, you should do two things:
|
| 5a January | These boxes will reflect the annual amount from 1a calendarized by month. |
| 5b February | |
| 5c March | |
| 5d April | |
| 5e May | |
| 5f June | |
| 5g July | |
| 5h August | |
| 5i September | |
| 5j October | |
| 5k November | |
| 5l December | |
| Check to indicate if Filer is a Payment Settlement Entity. | A Payment Settlement Entity makes payment in settlement of third party network transactions. Transactions conducted on vRxPro are third party network transactions. Covetrus North America, LLC qualifies as a Payment Settlement Entity and is therefore the "filer" for purposes of the 1099-K. |
| PSE's Name | A Payment Settlement Entity makes payment in settlement of third party network transactions. Transactions conducted on vRxPro are third party network transactions. Covetrus North America, LLC qualifies as a Payment Settlement Entity and is therefore listed as such on the 1099-K. |
| Check to indicate transactions reported are third party network | A third party payment network exists when one central organization (Covetrus North America, LLC) enters into agreements with "providers" (practices) to settle transactions between providers and purchasers (pet owners). The transactions conducted on vRxPro qualify as third party network transactions so this box is checked. |
Specifics around box 1a Gross Amount
The Gross Amount in box 1a is representative of the full, gross number of transactions processed on vRxPro.
- This amount represents the entire amount collected from pet owners on vRxPro for the year, inclusive of sales tax, and unadjusted for any discounts, promotions, etc.
- This amount INCLUDES ancillary charges such as shipping, fulfillment fees and sales tax.
- It IS NOT reduced for any credits, discounts, promotions, refunds, fees paid to Covetrus, etc.
Importance of Legal Entity and Federal Employer Identification Number (FEIN)
It is vital that Covetrus has received the correct Legal Entity Name and Federal Employer Identification Number for your practice. While this is part of our onboarding process, occasionally, practices provide incorrect information. When this happens, it is possible that the IRS will require Covetrus to levy Backup Withholding at a rate of 24%. In this instance, Covetrus will be provided with a backup withholding notice and ample time to work with the practice to remedy the issue. If this does not occur, amounts are withheld by Covetrus from deposits into the practice's account and paid to the IRS.
Please note that Covetrus is taking strides to run checks against the IRS database to confirm Covetrus has the correct legal entity name and federal employer identification number. However, please be on the lookout for any possible correspondence from the IRS regarding backup withholding and contact Covetrus Practice Support immediately upon receipt. Because the withholding is mandated by the IRS, the practice will be required to recover any amounts withheld from the IRS as part of the tax return filing for that year. Covetrus does not retain these funds and cannot provide reimbursement for these amounts.
Frequently Asked Questions
Covetrus does not provide professional tax or accounting services. We encourage you to speak to a qualified tax professional if you are seeking advice about your specific business or tax circumstances.
Q: Where can I find more information about form 1099-K?
A: The IRS maintains the 1099-K form itself along with a library of FAQ's and other information related to form 1099-K. Below are links to some of these. We encourage you to visit the IRS website yourself for more information:
Backup withholding | Internal Revenue Service
Understanding your Form 1099-K | Internal Revenue Service
Form 1099-K FAQs | Internal Revenue Service
Q: What is a form 1099-K?
A: Form 1099-K is an informational report required by the Internal Revenue Service (IRS) to document payments the practice received during the year from either:
- Credit, debit or stored value cards such as gift cards(payment cards)
- Payment apps or online marketplaces (third-party payment networks)
Transactions processed over Covetrus vRxPro fall under the second requirement above as vRxPro is an “online marketplace”.
Q: Will my practice receive a form 1099-K for Covetrus vRxPro activity?
A: It depends on your practice’s level of activity on vRxPro. Covetrus will issue form 1099-K to practices with at least $20,000 and 200 transactions in 2025. Practices with vRxPro activity falling under these thresholds WILL NOT receive a 1099K related to activity on vRxPro.
Q: What period of time does the 1099-K cover?
A: The 1099-K will cover the period from January 1 through December 31, 2025 and will be issued by WA Butler Company and Covetrus North America, LLC as the filer/payer.
Q: Why did my practice receive more than one form 1099-K?
A: Your practice may receive more than one 1099-K if:
- Your practice utilizes other payment processors for in-clinic point of sale transactions.
- Your practice changed payment processors during the year in question.
Q: What dollar amount will be shown in Box 1a and 1b of the 1099-K?
A: Form 1099-K will include the gross amount collected from pet owners over Covetrus vRxPro without reduction for credits, cash equivalents, discounts, fees, refunds, chargebacks, or any other amounts. Both annual and monthly totals will be
provided.
“Card not present transactions” in Box 1b will mirror the “gross amount” in Box 1a.
Q: Will the amount on the 1099-K include sales tax?
A: Yes, IRS regulations require that the 1099-K include the entire, gross amount collected from pet owners on vRxPro, inclusive of any ancillary charges like shipping and tax.
Q: Can the amount from box 1a of the 1099-K be used in the preparation of the practice's income tax returns?
A: Covetrus cannot and does not provide professional tax or accounting guidance. As stated by the IRS in its guidance, the 1099-K is meant to be used to "help figure and report your correct income on your tax return."
There are other reports provided by Covetrus that may be useful to the practice for year end accounting and tax-related purposes. These reports, available in the practice's vRxPro portal, include gross sales along with product cost and fees paid to Covetrus. An example is the annual version of the Transaction Detail Report.
The amount in Box 1a of the 1099-K will equal the sum of the Product Revenue, Shipping, Handling, Fulfillment Fee and Total Tax from the summary on page 1 of the annual Transaction Detail Report. Again, consistent with IRS requirements, the total in Box 1a will not factor in promotions or returns.
Q: Are there other documents provided by Covetrus that my practice can use in preparing Federal and State income tax returns?
A: Covetrus provides reports, available in the practice’s vRxPro portal, that include gross sales along with product cost and fees paid to Covetrus. An example of this is the 2025 version of the Transaction Detail Report.
Q: Why is it important for Covetrus to have the correct Legal Entity Name and Federal Employer Identification Number for my Practice?
A: If the legal name or Federal Employer Identification Number (FEIN) reported by Covetrus to the IRS on form 1099-K does not match IRS records, Covetrus may receive a notice regarding Backup Withholding at a rate of 24%. In this instance, Covetrus will be provided with a backup withholding notice and ample time to work with the practice to remedy the issue.
Covetrus is taking strides to run checks against the IRS database to confirm Covetrus has the correct legal entity name and federal employer identification number. However, please be on the lookout for any correspondence from the IRS regarding backup withholding and contact Covetrus immediately upon receipt.
If the issue is not remedied appropriately, Covetrus may be required to withhold funds from deposits to the practice at the 24% backup withholding rate.
Please refer to the IRS website for more information on backup withholding.
Q: If Covetrus levies backup withholding, how can my practice recover this amount and ensure there is no further backup withholding?
A: If backup withholding is levied by Covetrus, this can be remedied for future periods by providing the correct legal entity name and Federal Employer Identification Number (FEIN) to Covetrus. One method of doing so would be to provide Covetrus with an updated form W-9. This form can be accessed on the IRS website.
In general, amounts withheld by Covetrus cannot be recovered until the Practice’s income tax return is filed for the year in question. Recovery is made from the IRS as Covetrus does not retain these funds and CANNOT reimburse the practice.
If you have additional questions, or, if you believe your 1099-K is incorrect, please contact Covetrus Support at (877) 999-2838 or practicesupport@covetrus.com.