Businessman Phone Relief

Employers will have to file 1099s and W-2s in 2016 sooner than they did in 2015. It’s part of an IRS effort to get ahead of cybercrime.

Tax strategies

Employers: Accelerated Filing Deadlines for W-2s and 1099s in 2017

  • Scott Hess
  • 10/31/2016

One of the provisions in the Protecting Americans From Tax Hikes Act of 2015 (PATH Act) was to accelerate the filing deadline for Form W-2 and Form 1099-MISC. The new due dates take effect for the 2016 forms, which are due in 2017.

The provision is aimed at reducing refund fraud connected to the reporting of employee and non-employee compensation through information returns like the W-2 and 1099. Thieves have been attempting to file fraudulent returns early in the tax season to claim refunds before the IRS has received and verified the data from employers. The new accelerated timeline will get the employer information to the IRS sooner, thereby helping to limit the opportunity thieves have to file fraudulent returns.

New W-2 filing dates

W-2 Filing Step 2016 Due Dates 2017 Due Dates
Recipient copy due to employee January 31 January 31 (date remains the same)
Paper copy A due to Social Security Administration February 28 January 31
Electronic copy A due to Social Security Administration March 31 January 31

 The penalties for not filing W-2s on time also increase with the PATH Act.

Filing Date Fine Per W-2
W-2s filed up to 30 days late $50
W-2s filed more than 30 days late $100
W-2s filed after August 1 or not filed $260

 New 1099-MISC filing dates

1099-MISC Filing Step 2016 Due Dates 2017 Due Dates
Recipient copy due to employee January 31 January 31 (date remains the same)
Paper filing due to IRS February 28 January 31
Electronic filing due to IRS March 31 January 31

 The penalties for not filing Form 1099 on time remain unchanged.

Filing Date Fine Per 1099
1099 filed up to 30 days late $50
1099 filed more than 30 days late $100
1099 filed after August 1 or not filed $260

Keep in mind, the accelerated filing due dates for Form 1099 only pertain to Form 1099-MISC when reporting non-employee compensation payments in box 7.

The due dates for the federal copies of 1099s used to report payments other than non-employee compensation will remain as February 28 for paper-filed returns and March 31 for electronically filed returns.

New Safe Harbor Rules for De Minimis Errors

Since the forms must be filed to the IRS and the Social Security Administration on the same day they are due to employees, it is nearly impossible to make last-minute corrections before submission. However the PATH Act provides a safe harbor from penalties for failing to file correct forms or provide employees with correct statements.

There are no penalties if the error is $100 or less, or $25 or less if the error is related to a tax withholding. You do not have to submit a corrected return to qualify for the safe harbor provision, but employees receiving W-2s or vendors receiving a Form 1099-MISC can ask you to provide applicable correction forms.

How we can help

The new filing due dates mean starting your 2017 filing procedures earlier than you have in the past. Talk to your tax advisor if you need to establish workflow processes to help you comply with the new filing deadlines.