Forms 1099, W-2, and W-3 Due by January 31, 2020

Employers and other businesses must file wage statements and independent contractor forms by Jan. 31, 2020.

Before the Protecting Americans from Tax Hikes (PATH) Act, employers generally had a longer period of time to file these forms. But the 2015 law made a permanent requirement for employers to file their copies of Form W-2, Wage and Tax Statement, and Form W-3, Transmittal of Wage and Tax Statements, with the Social Security Administration by Jan. 31.

Certain Forms 1099-MISC, Miscellaneous Income, filed with the IRS to report non-employee compensation to independent contractors are also due at this time. Such payments are reported in box 7 of this form.

The early filing date means that the IRS can more easily detect refund fraud by verifying income that individuals report on their tax returns. Employers can avoid penalties by filing the forms on time and without errors. The IRS recommends e-file as the quickest, most accurate and convenient way to file these forms.

Get a jump on the due date

Employers should verify employees’ information. This includes names, addresses, and Social Security or individual taxpayer identification numbers. They should also ensure their company’s account information is current and active with the Social Security Administration before January. If paper Forms W-2 are needed, they should be ordered early.

Hopefully, you collected your W-9 forms from independent contractors to whom you paid $600 or more this year.  The information on W-9’s can help you compile the information you need to send 1099-MISC to recipients and file them with IRS.  Here is a link to the Form W-9 that you would need to request your contractors and vendors to complete.

Your organization should send Copy B (recipient) of the 1099-MISC to those whom you pay nonemployee compensation, as well as file Copy A with the IRS.  Form 1099-MISC should be provided to each non-corporate service provider who was paid at least $600 for services during 2019.   Generally, reimbursed expenses using a accountability plan (receipts are provided) can be excluded from amounts reported on box 7.  Reimbursed expenses reported on box 7 can be deducted by the contractor or vendor.   It is usually best for the organization to not have an accountability plan for independent contractors and the leave the responsibility for finding and keeping receipts up to your independent contractors.

1099-MISC forms generally don’t have to be provided to corporate services providers, although there are exceptions.   Corporate service providers would include C or S Corporation including a limited liability corporation (LLC).  There are no longer any extensions for filing for Form 1099-MISC late and there are penalties for late filers.  Starting in 2020, the IRS will be requiring 1099-NEC to end confusion and complications to taxpayers.  This new form will be used to report 2020 non-employee compensation for by February 1, 2021.

Enter amounts of $600 or more for all type of rents, such as rental paid for office space should be reported on box 1.   However, you do not have to report these payments on Form 1099-MISC if you paid them to a real estate agent or property manager as they should report the rent paid to the property owner.  Public housing agencies must report in box 1 rental assistance payments made to owners of housing projects.  See Rev. Rul. 88-53, 1988-1 C.B. 384.

Automatic extensions of time to file Forms W-2 and 1099-MISC  must meet extreme criteria to request an extension. The IRS will only grant extensions for very specific reasons. Details can be found on the instructions for Form 8809, Application for Time to File Information Returns.

For more information, read the instructions for 1099-MISC,  Forms W-2 & W-3 and the Information Return Penalties page at IRS.gov.

Please contact us if you have any questions or if we can help you with performing these reporting requirements.