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Tax Tip Tuesday: W-2 and 1099-MISC Due Date Changes for 2016

This week I want to remind you of some changes to due dates for W-2 and 1099-MISC forms that are effective for 2016. Also, we will discuss some new Iowa W-2 reporting requirements and penalties for not timely filing or providing 1099 forms.

The Protecting Americans from Tax Hikes (PATH) Act of 2015 requires forms W-2, W-3, and 1099-MISC returns to report non-employee compensation, to be filed on or before January 31st of the year following the calendar year to which such returns relate. Those returns are no longer eligible for the extended filing date for electronically filed returns.

W-2 New Filing Rules for 2016 for Iowa

  • Employers with 50 or more Iowa employees must electronically file W-2 forms with the state of Iowa. The due date is January 31, 2017.

  • Employers with less than 50 employees may, but are not required to electronically file W-2 forms with Iowa. You don't need to send a paper copy to Iowa.

  • Employers may, but are not required to electronically file W-2G and 1099 forms with Iowa.

1099 Penalties

  • If you fail to file a correct information return by the due date and you can't show reasonable cause, you may be subject to a penalty. You can see below that the IRS takes the filing of 1099’s very seriously.

  • The amount of the penalty is based on when you file the correct information return. The penalty is as follows.

  • $50 per information return if you correctly file within 30 days.

  • $100 per information return if you correctly file more than 30 days after the due date but by August 1st.

  • $260 per information return if you file after August 1st or you don't file required information returns.

If any failure to file a correct information return is due to intentional disregard of the filing or correct information requirements, the penalty is at least $530 per information return with no maximum penalty.

A similar penalty amount can also be applied for failure to provide the 1099 to the payee which would essentially double the above penalties.

Disclaimer: The items included in the Tax Tip Tuesday Video Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation. IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advise contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

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