Getting paid for scrap — cash, check, ACH, and 1099
The last leg of a yard run is the payment desk. Federal and state law constrain what yards can hand over in cash, what triggers a 1099, and what ID a yard has to record. This category covers payment methods, IRS thresholds, state-specific cash caps, and the practical side of running scrap as a side or main income stream.
What this category covers
- Payment methods — cash, check, ACH, peddler-account ledger
- Cash limits by state — most states cap non-ferrous cash at $50–$100
- 1099 thresholds — when the yard reports your payouts to the IRS
- Recordkeeping — what to track if scrapping is regular income
Payment methods at a typical yard
| Method | Typical use case | Speed | Friction |
|---|---|---|---|
| Cash | Small ferrous loads under state cap | Immediate | State-capped; ID logged |
| Check | Mid-to-large loads, walk-in sellers | Same day | May need to clear; some yards mail |
| ACH / direct deposit | Peddler accounts, repeat sellers | 1–3 business days | Setup paperwork, banking info |
| Prepaid card | Some larger chains | Immediate | Fees on some cards; cap rules vary |
| Account credit | Industrial accounts, ongoing buyers | N/A | Reconciled monthly |
State-level cash caps
Most U.S. states cap or restrict how much cash a yard can pay for non-ferrous scrap per transaction or per day, citing copper-theft prevention statutes. Specifics vary widely — confirm with the yard or your state's scrap-dealer act before assuming a number — but the directional pattern looks like this:
| State | Non-ferrous cash treatment | Hold / cooling-off | Notes |
|---|---|---|---|
| California | Cash payments restricted; check or EFT typically required for non-ferrous | 3-day hold on check disbursement is common | Photo ID, fingerprint, and seller signature at most yards |
| Texas | Cash limits enforced under the Metal Recycling Entities statute | 3-day hold period on certain non-ferrous transactions | Registered scrap dealer required; ID and vehicle info logged |
| New York | ID and recordkeeping required statewide; some counties cap or prohibit cash for non-ferrous | Varies by jurisdiction | NYC and several counties layer on stricter rules |
| Illinois | Non-ferrous scrap dealer act mandates documentation and seller ID | Hold period applies to certain transactions | Cash often paid only below a low per-transaction floor |
| Florida | Cash payment restrictions on copper, catalytic converters, and other targeted categories | Hold periods apply to flagged categories | Mailed check or delayed payout common for restricted items |
Many other states cap non-ferrous cash in the $25–$100 range per transaction, with checks or prepaid cards used above that. Ferrous loads (steel, iron) are generally less regulated than copper and other non-ferrous metals. For the regulatory backdrop on these rules — federal and state — see the Industry Guide → Regulation category.
When a 1099 lands
Yards typically issue a 1099-NEC or 1099-MISC when annual payouts to a single seller exceed the IRS reporting threshold (currently $600 for most categories, with separate thresholds under tightening enforcement). For scrappers running a side income, this means:
- Track every yard ticket — even small ones — by date, weight, grade, and payout
- Expect 1099 paperwork by late January for the prior tax year
- Schedule C income, with mileage and equipment as deductible expenses
Above $10,000 in cash from a single buyer in a 12-month period, a Form 8300 federal cash-reporting filing applies — a threshold that mostly affects industrial-tier sellers. None of this is tax advice; consult a CPA when scrap income crosses from hobby to side business.
Frequently asked questions
How much cash can a scrap yard pay me?
Depends on the state. Most cap non-ferrous cash at $50–$100 per transaction; ferrous is often less restricted. Anything above the cap is paid by check, ACH, or prepaid card.
Will I get a 1099 from the yard?
If your annual payouts from one yard exceed the IRS threshold, yes. Larger yards report automatically; smaller yards may not, but you're still responsible for declaring the income.
What ID do I need to bring?
A government-issued photo ID is universal. Many states also require a thumbprint, license-plate photo, or electronic record sent to law enforcement. See the Industry Guide → Regulation category for the legal background.
Related
- Selling Guide hub — the full seller workflow
- Preparation — sort quality affects the size of the payout
- Pricing — what a clean load is actually worth
- Logistics — transport costs that net out of payout
- Industry Guide → Regulation — federal and state ID, hold, and reporting rules
- Industry Guide → Vendors — payment-policy norms at the larger buyers
- Local Guide → Scrap yards near me — what to ask each yard about payment