You now have less time to send out Forms W-2 for employees and Forms 1099-MISC for contractors you hired. There is a shorter Form W-2 filing deadline and Form 1099-MISC filing deadline.
The deadlines are changing as part of the Protecting Americans from Tax Hikes (PATH) Act, which Congress passed in 2015.
Form W-2 filing deadline changes
Form W-2 is a document that lists the wages and taxes withheld for an employee. You need to fill out a Form W-2 for each of your employees. You will then send out the parts of each form.
In the past, you sent Form W-2 to employees by Jan. 31. Then, you sent Forms W-2 and W-3 to the Social Security Administration (SSA) by Feb. 28, or March 31 if you e-filed.
Now, all parts of Form W-2 and Form W-3 are due by Jan. 31. If you e-file for business, the deadline is also Jan. 31. If the deadline falls on the weekend or a legal holiday, the deadline moves to the next business day.
You no longer have a chance to make last-minute changes between sending the form to employees and the SSA.
The earlier deadline means the IRS can verify information on employees’ Forms 1040 sooner. In the past, there could be a gap between the IRS receiving someone’s Form 1040 and Form W-2. This gap made it difficult for the IRS to verify the accuracy of the Form 1040. Now, the IRS will have an easier time knowing if people really earned a refund, or if they actually owe money.
Employees can still ask you for a corrected return (Form W-2c). Before, you might have sent out corrected returns before you sent Form W-2 to the SSA. But now, you have to send out corrected returns after you send Form W-2 to the SSA. If you need to correct a return, make sure you send a corrected return to the SSA.
Penalty safe harbor
A safe harbor may now cover some errors on Forms W-2 with incorrect dollar amounts. The penalty relief applies to withholding errors up to $25, and other amounts with errors up to $100.
If a safe harbor covers you, you do not have to file a corrected Form W-2. However, if an employee requests that you send a corrected return, the safe harbor does not apply.
Form 1099-MISC filing deadline changes
The deadline for IRS Form 1099-MISC has also changed.
Previously, you needed to send Form 1099-MISC to contractors by Jan. 31. Forms 1099-MISC and 1096 were due to the IRS by Feb. 28, or March 31 if you e-filed.
Now, if you report nonemployee compensation in Box 7, all parts of Form 1099-MISC and Form 1096 are due to contractors and the IRS by Jan. 31. The deadline for e-filing is also Jan. 31. If the deadline falls on the weekend or a legal holiday, the deadline moves to the next business day.
If you use Form 1099-MISC for purposes other than reporting nonemployee compensation, the form is due to the payee by Jan. 31. But, the form is due to the IRS by Feb. 28, or March 31 if you e-file.
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