The W-2 and Form 1099 Conundrum

The W-2 and Form 1099 Conundrum: Are They Now Due…. Or Not Due? This is a good question. The rules have changed, and the answer to this issue is not as cut and dry as it once was. This simple question may not be so simple. When are W-2’s and 1099’s due to be sent out? I decided to ponder the weight of this question, and determined that I must not be the only person with this misapprehension. After all, even CPA’s have human brains. No one can carry all the information around with them inside their heads.

So, with the help of our friends at the IRS, I’ll give you the blow by blow changes to the requirements. 2017 will be a year of further change to the rules governing tax filing and reporting.

Background

In an effort to combat fraud, The Protecting Americans from Tax Hikes (PATH) Act of 2015, was passed by Congress and signed by President Obama in December. The act revises the filing deadline for Form W-2 and certain types of Form 1099.

What’s Changing?

Until now, employers had two dates to keep in mind when remitting W-2’s:

  • January 31, to provide employee copies, and
  • February 28, for paper filings submitted to the Social Security Administration (March 31 for electronic filings)

Beginning with 2016 forms, employers will now have one filing deadline for all Federal W-2s, January 31. This is true for both employee and agency copies, or whether filing paper or electronic returns.

What about Form 1099-Misc? The new January 31 deadline applies to certain types of 1099s. If you’re filing Form 1099-Misc and reporting amounts in Box 7Nonemployee Compensation, then you will need to meet the new filing deadline of January 31.

If you don’t have amounts in Box 7, then the deadline remains February 28 for paper filings or March 31 for electronic filings.

Impact for Employers

With this new deadline, it’s important that employers be well prepared to complete year-end tasks. This means:

  • Verifying accuracy of employee information
  • Reporting/submitting any year-end adjustments as soon as possible
  • Reviewing year-end totals for any discrepancies

If you need to make corrections after sending your file to the Social Security Administration, you can do so by filing Form W-2c, Corrected Wage and Tax Statement.

Impact on State W-2 filings

Many states have also adopted the Federal change the new deadline of January 31, beginning with the upcoming filings for 2016 Form W-2. For reference, we have listed the state filing deadlines below.

Although this might seem a bit confusing, thirteen out of fifty states have elected to keep the due dates separate.  New Jersey is one state that has chosen to maintain the requirement for filing Form 1099’s to a February 28th deadline. For the complete run-down on state requirements, you can find a full listing here.

Hopefully, this bit of information will help clarify any indecision, confusion or misinformation you may be experiencing regarding what the requirements are for your particular business.

If there are any questions or to resolve any uncertainty, please feel free to reach out to us. We are happy to help.  Moreover, don’t forget to make sure you are in compliance to avoid unnecessary penalties.

By | 2017-05-18T22:45:02+00:00 January 17th, 2017|blog|0 Comments

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