United States

New deadlines for 2016 wage reports: Is your company ready?

TAX BLOG  | 


The new Jan. 31, 2017, deadline for filing W-2s, W-3s and 1099-MISC (Box 7) reports with the Social Security Administration or the IRS may catch many companies unprepared this year. The new deadline was enacted as part of HR 2029, the Consolidated Appropriations Act of 2016, late last year.

Prior to 2016, the deadline for Forms W-2 and W-3 with the Social Security Administration and Forms 1099-MISC was February 28 for forms filed on paper and March 31 for forms filed electronically. This new deadline was designed to combat tax refund fraud where fraudulent returns are filed with IRS prior to the time it has access to data from Forms W-2 and 1099-MISC.

The new filing deadline now matches the deadline for providing information to employees or independent contractors so that the IRS is armed with employer information to confirm individual income tax reporting.

Most payroll processing companies are prepared to handle the new filing deadline; however, many small or midsize employers rely on in-house departments – accounts payable or human resources – to manage the filing deadlines and those departments may not be aware of the Jan. 31, 2017, filing deadline.

Penalty exposure

Failure to file accurate W-2s with the Social Security Administration and Forms 1099-MISC (Box 7) with the IRS by Jan. 31, 2017 can result in a penalty as high as $250 per form. A limited extension of time to file certain information returns, including Forms W-2 and 1999 is available by filing Form 8809. https://www.irs.gov/pub/irs-pdf/f8809.pdf.

Companies that need an extension of time to file should file Form 8809 (electronically or on paper) as soon as possible in January 2017.


Patti Burquest

Principal

Patti has extensive experience handling IRS examination and appeals matters for all types of business. Reach her at patti.burquest@rsmus.com.

Areas of focus: Tax ControversyWashington National Tax