New 1099-MISC and W-2 Due Dates

New 1099-MISC and W-2 Due Dates

In a step towards combating identity theft, the Protecting Americans from Tax Hike (PATH) Act, enacted December 2015, mandated new requirements for businesses when reporting non-employee compensation payments in box 7 on Form 1099-MISC and when filing copies of Form W-2.

New Deadlines
Prior rules required 1099-MISC forms to be submitted to the IRS and copies of W-2s to be submitted to the Social Security Administration by February 28, 2017 if done so by paper filing and March 31, 2017 if filed electronically.  The PATH Act now requires these forms to be submitted by a strict January 31, 2017 deadline.  Note that Form 1099-MISC only needs to be submitted to the IRS by January 31 if amounts are being reported in box 7 non-employee compensation.  However, if you are filing 1099-MISC forms with amounts in boxes other than 7, those also need to be filed by January 31, as all 1099-MISC forms need to be submitted at the same time with Form 1096 – Annual Summary and Transmittal of U.S. Information Returns.  The due dates for all other 1099 type forms did not change.

Filing Extensions
For 1099 forms, there is the ability to apply for a 30 day extension of time to file by completing Form 8809.  This automatic extension can be done either by paper or electronically through the IRS Filing Information Returns Electronically (FIRE) system.  The extension must be filed by the original due date of the return.  No signature or explanation needs to be provided.  A second 30 day extension may also be allowed for certain hardship conditions by filing Form 8809 by the extended due date.  The second extension requires a signature and explanation.

As for W-2s, a one-time, 30 day extension can be applied for using Form 8809, but a signature and explanation are required.  A second extension is not allowed.

If returns are not filed by the original due date or extended due date, if an extension was timely filed, penalties may apply.  Penalties can also be assessed if all required information is not present, incorrect information is on the return, or if the return was filed on paper when an electronic file was required (having greater than 250 forms of one form type).

What This Means for Employers
To meet the new deadline, employers will need to be well prepared by year-end.  Before 2016 comes to a close, verify the accuracy of employee information, make appropriate year-end adjustments and review year-end totals for discrepancies.

If you discover that you need to make a correction after you file with the Social Security Administration, you can do so by filing Form W-2c, Corrected Wage and Tax Statement.

For additional information please email our tax team at info@herbein.com.

Article compiled by Ben Rusnak and Christel Wenrich.