New W-2 and 1099 Filing Deadlines Have Employers Scrambling

As the days leading up to the presidential inauguration of Donald Trump dwindle down to a precious few, CPAs and payroll departments of employers likely won’t have politics on their mind. They might be scrambling, however, to meet new filing requirements for Forms W-2s and certain types of 1099s. The deadline for the 2016 tax year is January 31, 2017.

The filing changes were included in the Protecting Americans from Tax Hikes Act (PATH), Act, signed by President Obama in the waning days of 2015. These provisions were enacted to simplify matters and improve protection against fraud. If you haven’t made any concessions to the new rules, this will serve as a reminder.

Previously, employers generally were required to meet two separate filing deadlines for W-2s:

The due date for providing employees with copies of the W-2s was January 31,

The due date for providing the IRS with copies of W-2s was February 28 for paper filings and March 31 for electronic filings.

In all instances, the deadline is pushed back to the next business day if the due date falls on a weekend or holiday.

However, beginning with 2016 forms, there’s just one deadline for all W-2s: January 31. It doesn’t matter whether copies are being sent to employees or the IRS or if they are paper or electronic filings.

In addition, the earlier January 31 deadline applies to certain types of 1099s. For Forms 1099-MISC that include amounts in Box 7, Nonemployee Compensation, the deadline is also moved up to January 31. Otherwise, the due date remains February 28 for paper filings or March 31 for electronic filings.

Nonemployee compensation may include fees for professional services, commissions, awards, travel expense reimbursements and other payments for services performed for the employer’s trade or business by someone other than an employee. This is common for firms that use independent contractors.

Finally, many states impose similar filing requirements for W-2s. Although some states were “ahead of the curve” and already required a January 31 deadline, others have subsequently adopted the earlier date for the 2016 tax year.

Employers should get their ducks in a row before the end of the year. For instance they can verify the accuracy of employee information, review year-end reporting for discrepancies and make whatever adjustments, if any, are necessary.

Note: In a pinch, you can file Form W-2C, Corrected Wage and Tax Statement with the IRS.

Don’t wait until the last minute to handle reporting responsibilities. Address these matters before President Trump is sworn into office.