Updated IRS Regulations

For W-2 and 1099 filings

Starting with the 2023 tax year, the IRS has implemented new regulations for the electronic filing of W-2 and 1099 forms. If you have 10 or more information returns, you must file them electronically. This is a significant change from the previous threshold of 250 returns.
The new rules apply to a variety of forms, including W-2, 1099-NEC, 1099-MISC, and many others. The threshold of 10 returns is calculated based on the aggregate number of different types of returns. For example, if an employer has eight W-2s, one 1099-NEC, and one 1099-DIV, they are required to electronically file all forms.
Non-compliance with these new regulations could result in penalties. The IRS may impose a penalty of up to $310 per information return for non-compliance. If a business fails to issue a form by the 1099-NEC or 1099-MISC deadline, the penalty varies from $60 to $310 per form for 2023, depending on how long past the deadline the business issues the form.
The IRS has also opened a free portal for businesses to file Form 1099 series information returns electronically. This move aligns with efforts to reduce paper waste and promote environmentally friendly practices.
Please ensure you are prepared for these changes to avoid any penalties. If you have any questions or need assistance with these new e-filing requirements, consider consulting with one of our tax professionals.

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