To help the IRS detect and prevent refund fraud, Congress and President Obama signed The Protecting Americans from Tax Hikes (PATH) Act of 2015. The act revises the filing deadline for Form W-2 and certain types of Form 1099. According to IRS Commissioner, John Koskinen, “As tax season approaches, the IRS wants to be sure employers, especially smaller businesses, are aware of these new deadlines”.
The earlier deadlines for employers to submit W-2s were January 31 to provide employee copies and February 28 to submit paper filings to the Social Security Administration (SSA), and March 31 for electronic filings.
Beginning with the 2016 forms, employers are now subject to a single deadlines for all Federal W-2s, regardless of employee or agency copies or paper or electronic filings.
The revised deadline is January 31.
Under the new deadline, employers filing 249 or fewer copies of Form W-2 can file these forms electronically or by paper, but employers with 250 or more copies must file electronically.
The new deadline applies to certain types of Form 1099 as well. Employers using Form 1099-Misc and reporting amounts for Box 7, which is called ‘Nonemployee Compensation’, used for reporting payments to independent contractors etc., must file by January 31.
There are also changes in requesting an extension to file Form W-2. If an extension is necessary, one 30-day extension to file Form W-2 is available, called Form 8809, Application for Extension of Time to File Information Returns, which is not automatic and must be completed before January 31. To make corrections after filing Form W-2 with SSA, employers can file Form W-2c, Corrected Wage and Tax Statement. Many states have also adopted the federal change of the January 31 deadline.
You need to be prepared!
In order to be prepared, employers should be prepared with year-end tasks. Employers should verify the accuracy of their employees’ information such as their filing status and confirm their mailing addresses before the year ends. Employers should also verify that form W-9 information for 1099-Misc contractors is current and accurate. They should also submit and report any year-end adjustments as soon as possible and review year-end totals for any discrepancies.
Employers who fail to adhere to the deadline may find themselves in hot water, especially if disgruntled employees who are expecting a tax return complain to the IRS. Too many complaints to the IRS, and employers may find themselves subject to an investigation. That’s not all, putting off filing too far past the deadline can result in penalties starting from $250 from the IRS that can even go up to a thousand dollars. An additional $5000 may also apply for filing a false document if you do not file an accurate form.
Employers need to be updated with the latest regulations that may impact their business. Expert Dayna J. Reum, CPP, FPC, offer insights in this webinar on New January 31 Filing Deadline for W-2 and 1099-MISC Forms with best practices and legislative updates employers should keep in mind for the changing deadlines for form W-2 and 1099.