New Rules for Filing Forms W-2 and 1099

The IRS has updated the filing requirements for the W-2s and 1099s for the 2023 tax year (which are filed in 2024.) This change reduces the threshold for electronically filing these forms from 250 returns in the prior year to 10 or more returns for the 2023 tax year. Therefore, if your business has an aggregate of 10 or more W-2s and 1099s (or other information returns), you are required to file electronically. Additionally, a penalty applies if you file returns on paper that were required to be filed electronically. Also, if you need to file a correction and the original return was submitted electronically, you will be required to submit the correction electronically.

Registering for an account with the Social Security Administration for filing your W-2s

It is highly recommended that you register now with the SSA now so that you are ready to file your W-2s in January 2024. 

The registration can be found here:  Business Services Online (ssa.gov). 

We suggest that you start the process now to avoid any issues when it is time to file your W-2s. If you registered in a prior year, now is a good time to check to ensure that your information, including your password, is current.

Registering for an account with the IRS for filing your 1099s

If this is the first time that you will be filing your 1099s, or other information returns with the Internal Revenue Service, you will need to complete an IRIS Application for TCC which will allow you to e-file your 1099s (or other information returns). It is free and you do not need special software to use this system. The IRS states that you should allow 45 days for processing, so this should be completed as soon as possible. You will need to validate your identity using ID.me, and an SSN or ITIN, and individual authentication is required. Please note that in previous years, the IRS used the Filing Information Returns Electronically (FIRE) system to file 1099s, and before it is totally replaced by IRIS, the FIRE system will remain available for bulk filing Form 1099 series and other information returns at least through the 2023 filing season. The IRS has announced that the FIRE system will be down from 3 PM November 27, 2023, until January 8, 2024, for annual updates.

W-2 File Specifications

See Specifications for Filing Forms W-2 and W-2c (ssa.gov) for file specifications for electronic filing Form W-2 with the SSA.  

1099 Filing Instructions

See Publication 5717 (Rev. 11-2022) (irs.gov) for information on how to file the 1099s through the IRS Information Returns Intake System (IRIS).  Additional filing guidelines for 1099s using the FIRE system can be found at Publication 1220 (Rev. 9-2023) (irs.gov).

Filing Deadlines

The deadline to submit the W-2s to the SSA is January 31, 2024. The most common 1099s are Form  1099-NEC, Nonemployee Compensation and Form 1099-MISC, Miscellaneous Information. Both are due to the recipients by January 31, 2024. Form 1099-NEC also must be filed with the IRS by January 31, 2024, regardless of whether filed in paper or electronically. Form 1099-MISC must be filed by January 31, 2024, if filed in paper, but can be filed by February 28, 2024, if filed electronically. A 30-day extension can be obtained by filing the Form 8809 (Application for Extension of Time to File Information Returns) with the IRS. You must be able to show that there are extenuating circumstances that is preventing you from filing by the stated due date. 

Examples of such circumstances are:

• A catastrophic event in a Federally Declared Disaster Area
• A fire, casualty or natural disaster that affected the operation of the business.
• A death, serious illness, or unavoidable absence of the individual responsible for the filing the information returns. 

This extension cannot be used to request an extension of time to give employees or payees copies of their W-2s or 1099s.

If you will be unable to comply with the threshold reduction due to experiencing a hardship, you can submit a Form 8508, Application for a Waiver from Electronic Filing of Information Returns.

Pennsylvania Electronic Filing Requirements

Pennsylvania also requires that the W-2s and 1099s be filed electronically through the Pennsylvania myPATH system, if you have more than 10 of each.  If you do not have a myPATH account, it is recommended that you sign up for an account as early as possible to ensure that you are prepared for electronically filing your year-end W-2s and 1099s. Both W-2s and 1099s must be filed electronically before you can file the Annual Withholding Reconciliation Statement (REV-1667). The W-2s and 1099s are due by January 31, 2024. This Pennsylvania W-2/1099 Reporting Instructions and Specifications Handbook has the file specifications for uploading the W-2s and 1099s.

Please reach out to your trusted Herbein advisor if you have questions regarding this article OR any year-end tax reporting questions.

Article contributed by Michelle Sowers