As we head into the final part of the year, it’s time to start looking at deadlines that will impact businesses at the beginning of 2017. Chief among these deadlines are the new filing requirements for employers to file Form W-2 and certain types of Form 1099.
Historically, filers have been required to provide both W-2 and 1099-MISC forms to their recipients by January 31, but they were not required to submit the forms to the Social Security Administration or the IRS until February 28 for paper forms or March 31 for e-filing. Those later deadlines are changing. Beginning in 2017, both the W-2 and 1099-MISC recipient copies need to be submitted to SSA and IRS by January 31 (whether by paper or electronic filing), months earlier than previous years. This compressed deadline has the potential to increase business owners’ workload significantly.
Why is this such an issue? Well, on top of this new compressed deadline, the filing deadlines for Forms 1095-B and 1095-C (healthcare forms) also come on January 31 for recipient delivery. 2017 will therefore see businesses facing a time crunch when they need to do wage, income, and Affordable Care Act-related reporting for 2016. In addition, the “window” for correcting any mistakes before filing with SSA and IRS has been eliminated. Accuracy by January 31 is now absolutely critical. (You can make corrections after sending your file to the Social Security Administration by filing Form W-2c, Corrected Wage and Tax Statement, but that’s just one more thing to do.)
Making matters even more complicated, the IRS recently eliminated the automatic 30-day extension of time to file W-2 forms. Previously, filers could automatically get a 30-day extension by submitting Form 8809 to the IRS on or before January 31. Filers were also able to request an additional 30-day extension, so they could push their e-file deadline out to the end of May. Those extensions won’t be available to businesses anymore.
Note that the new filing deadline, as it relates to Form 1099-MISC, only affects filers that report nonemployee compensation payments in box 7. The overwhelming majority of 1099-MISC filers report information in box 7, so the change is likely to affect your business.
We can thank the PATH Act of 2015 for these changes, as well as advocacy by the AICPA. There has been a push for years to both eliminate fraud and make tax deadlines more logical. But why this is happening isn’t all that important. The important thing is that we comply with the changes. My advice to you is to use the next few months to prepare for what’s going to hit us in January. Verify the accuracy of your employee information, report any year-end adjustments as soon as possible, and review year-end totals for any discrepancies. A sit-down with us is a logical first step.
