As the deadline approaches for filing informational tax returns, it is important to consider the updated filing requirements for these returns. The electronic filing threshold, which was previously 250 informational returns, has been reduced to 10 or more returns for 2023 tax year filings. Additionally, the count has changed to include the aggregate of informational returns (primarily the W-2 and 1099, but other informational returns are also included). In past years, the limit only applied to returns of the same type.
The changes to the quantity and type of returns considered will likely impact many taxpayers, requiring action to be taken before the electronic filing deadline at the end of January 2024.
For example, an entity that paper-filed eight 1099s and five W-2s for 2022, is now required to electronically file these returns for 2023, since the combined number of filings exceeds the 10-return threshold. Electronic tax return filing is also required for taxpayers with 10 or more returns (including income and information returns) in the current year. The non-compliance penalties range from $60-$310 per return, so it is imperative to consider the new requirements.
Registering for E-filing
Entities that exceed 10-return limit and have not e-filed returns before will need to obtain a transmitter control code (TCC) to use the IRS’s free filing tool, IRIS. (click here for the TCC application) The IRS warns that it can take up to 45 days for processing of TCC applications, so this action should be taken immediately.
After January 1, 2024, legacy transmittal codes will no longer work for electronically filing 1099 returns using the FIRE system. Additional information on how to e-file returns using IRIS can be found in the IRIS Taxpayer User Guide.
To e-file any W-2s, taxpayers need to register with the SSA on their website. The W-2s must meet certain specifications to be submitted electronically. The deadline for submitting W-2s to the SSA is January 31, 2024.
The deadline to provide 1099-NEC and 1099-MISC forms to the recipients is January 31, 2024. The 1099-NEC is also required to be submitted to the IRS by January 31, 2024, but the 1099-MISC deadline for submission tot he IRS is February 28, 2024.
Considerations for Pennsylvania Filing
The State of Pennsylvania also requires electronic filing of W-2s and 1099s if more than 10 of each type of return is filed. These returns should be filed online through myPATH.
Although some actions on myPATH can be performed without an account, a registered profile must be established to e-file W-2s and 1099s. (click here to begin the registration process)
Taxpayers should register as soon as possible to allow time to electronically file the returns before the January 31, 2024 deadline (for both W-2s and 1099s). Instructions and specifications for electronic filing through myPATH can be found in the W-2/1099 Reporting Instructions and Specifications Handbook.
Please contact a GYF Tax Executive at 412-338-9300 if you have questions or need assistance with e-filing informational returns or any other tax issues.
