The importance of filing timely
The IRS has gotten serious about 1099-MISC and 1099-NEC due dates. Penalties have risen significantly and they apply separately to copies sent to recipients (i.e. vendors) and the IRS. Companies can face penalties for late filing that can be as high as $560 for each 1099-MISC or 1099-NEC sent late to a recipient PLUS another $560 for each form not filed timely with the IRS. This article only looks at filing deadlines for Form 1099-MISC and Form 1099-NEC.
RECIPIENT 1099-MISC and 1099-NEC due dates
If a payment is required to be reported on a 1099 form you must send Copy B of the 1099 to the party that was paid. You can avoid late-filing penalties by furnishing 1099s to your recipients timely.
2/01/2021 – Form 1099-MISC (except box 8 and 10) and Form 1099-NEC sent to the recipient
2/16/2021 – Form 1099-MISC with only box 8 & 10 sent to the recipient.
Be certain that you properly address and mail out forms on or before the due date. If you are filing electronic statements, be certain to post the forms to a website on or before the due date. Also, note that companies with 250 or more (expected to be 100 or more in 2020) information returns are required by the IRS to file them electronically.
IRS 1099-MISC due dates
Due dates to file with the IRS vary by 1099 form filed and if the forms were filed by paper or electronically. If a payment is required to be reported you must send Copy A of each 1099 and summary Form 1096 to the IRS.
2/01/2021 – 1099-NEC: Paper & electronic filed with the IRS.
3/01/2021 – 1099-MISC: Paper filed with the IRS.
3/31/2021 – 1099-MISC: Electronic filed with the IRS.
Timely filing with the IRS
You will meet the requirement to file timely if the form is properly addressed, postmarked, and mailed using the official mail of the United States, or private delivery service (PDS) designated by the IRS on or before the due date. If the regular due date falls on a Saturday, Sunday, or legal holiday in the District of Columbia or where the return is to be filed, file by the next business day. A business day is any day that is not a Saturday, Sunday, or legal holiday in the District of Columbia or where the return is to be filed.
Filing an extension
You can request a 30-day extension to furnish Form 1099 to your recipients by sending a letter to the IRS. Be sure to mail your request by the due date of the form. For more information see the section, Extension of time to furnish statements to recipients, in part M of the General Instructions for Certain Information Returns. In addition, you can also request an automatic 30-day filing extension with the IRS by completing Form 8809. There is no automatic extension available for Form 1099-NEC.
As soon as you know that a 30-day extension of time to file is needed, file From 8809.
Follow the instructions on Form 8809 and mail it to the address listed in the instructions on the form. See the instructions for Form 8809 for more information.
You can submit the extension request online through the FIRE System. You are encouraged to submit requests using the online fillable form. See Pub. 1220, Part B, for more information on filing online or electronically.
Where to file
All paper information returns will be filed with one of three IRS centers depending on your state. The centers are Austin, TX, Kansas City, MO, and Ogden, UT. See part D of the General Instructions for Certain Information Returns and Form 1096 for more information. We recommend filing electronically with our 1099 partner tax2efile.com or directly with the IRS FIRE system.
Electronic filing threshold
The threshold number requiring electronic filing for tax year 2020 forms listed in the Guide to Information Returns table found in the General Instructions for Certain Information Returns remains at 250 at this time, however, the Taxpayer First Act (P.L. 116-25, sec 2301) has been enacted to lower the threshold, but not until regulations are issued. We expect the regulations lowering the level to 100, with respect to the 2020 forms listed in the Guide to Information Returns table found in these instructions, due to be filed in 2021, with further lowered limits in future years, to be issued later in 2020. See IRS.gov/Form1099 later this year for the regulations and the limits change. The rule applies separately to each type of form.
Note that the information above only relates to filing with the IRS. You may also need to file an information return with your state government. The state filing requirements may be satisfied with the Combined Federal/State Filing Program. Through this program, the IRS will forward information returns like the 1099-MISC to participating states. You must file electronically to participate in this program. See Part A. Sec. 11 of IRS Publication 1220 for a list of participating states. Contact your state for requirements if they are not a participating state. Visit the W9manager Academy state compliance section for a complete list of requirements by state.
Disclaimer – Any accounting, business or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties.