New Filing Deadlines/Penalties for Forms W-2 and 1099

1657641Last year legislation was passed regarding 1099s and other forms issued by employers. When The Trade Preference Extension Act of 2015 passed, it increased the late filing and failure-to-file penalties for several forms. Fees will be charged if forms were not filed by the due date, not having all the needed (or correct) information, and also if the intended recipient of the form did not receive it timely. Depending on the failure, the penalty increased from $100 to $250 per return. Businesses who purposefully do not follow the filing requirements fees will double, from $250 to $500. If a company intentionally has filing failures, the fee charged is $1,000 per form, with no cap on possible penalties.

If you are a small business owner with gross receipts of $5 million or less, there is a reduced maximum penalty applied. The assessment fees did double from before the act was passed, but there is a limitation on penalties. The Penalties are as follows: $1 million maximum for failure-to-file, corrections within 30 days are $175,000 and if forms are received for correction before August 1st, $500,000.

Filing deadlines moved up

The new reporting deadlines for paper or electronic forms W2 is January 31st. Previously, the deadline to turn in government copies was February 28 for paper filings and March 31st for filing electronically. The new deadline also applies to form 1099-Misc if reporting income in Box 7: Non-employee compensation. If you are not reporting information in Box 7, the deadline does not change. 1099s filed late, but within 30 days will have a $50 per form fee charged. If forms are turned in by August 1st in the year they were due, the penalty is $100 per form.

Who must file 1099s

An individual that has a business or trade is required to file 1099s if they pay for services, rent, real estate sales, $600 or more won from a prize, and non-employee compensation. If there was a payment of more than $10 for royalties, interest, and dividends, a 1099 form is also necessary.

Be Prepared to File

Avoiding penalties can be easy. Simply ask all new vendors for a W9 form before issuing a payment. The information provided on this form is essential in filling out a 1099-Misc form. If you have this data on file, you will not have to spend valuable time requesting this information later.


Be sure to file W2/W3 and 1099 forms by January 31st to avoid costly penalties. It’s imperative that recipients receive their forms in enough time to review in the event changes need to be made. If mistakes aren’t brought to your attention until after the due date, a correction will need to be filed.

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