Notification
New January 31 due date for Form W-2, Form W-3 and Certain Forms 1099-MISC
Effective with returns due after January 1, 2016, penalties for not filing correct information returns and/or not furnishing correct payee statements have increased and are now subject to inflationary adjustments.
Examples of affected forms include: Forms 1098, 1099, W-2G and W-2.
The amount of the penalty is based on when you file the correct information return (IRC 6721) or furnish the correct payee statement (IRC 6722). The penalty for not filing a correct information return is separate from the penalty for not providing the correct payee statement. For example, if you don’t file a correct Form 1099-MISC with the IRS and don’t provide a correct Form 1099-MISC statement to the payee, you may be subject to two separate penalties.
To Avoid Penalties
Beginning with the 2016 tax year:
Employers must send Copy A of Forms W-2 and W-3 to the Social Security Administration by January 31 of the following year for both paper and electronic forms.
Employers must furnish Copy B and any other applicable copies of information returns to the employee by January 31 of the following year.
Businesses, including tax exempt and government entities, must send Copy A of Form 1099-MISC to the IRS by:
- January 31 of the following year when you’re reporting non-employee compensation payments in Box 7 (paper and electronic);
- The last day of February of the following year if filing by paper when you’re NOT reporting non-employee compensation in Box 7; or
- March 31 if filing electronically when you’re NOT reporting non-employee compensation in Box 7.
In years prior to the 2016 tax year:
Businesses, including tax exempt and government entities, must send Copy A of Forms 1098, 1099, W-2G and other information returns to the Internal Revenue Service with transmittal Form 1096 by:
- The last day of February of the following year if filing by paper; or
- March 31 if filing electronically.
Employers were also required to send Copy A of Form W-2 to the Social Security Administration with transmittal Form W-3 by:
- The last day of February of the following year if filing by paper; or
- March 31 if filing electronically.
In addition, employers filing 250 or more information returns must file electronically unless granted a waiver by the IRS.
Penalty Rates
The penalty rates and maximums for not filing correct information returns and/or not furnishing correct payee statements, including inflationary adjustments if applicable, are reflected in the following table (*-as adjusted for inflation):
| Large Businesses with Gross Receipts of More Than $5 Million (*Average annual gross receipts for the most recent 3 taxable years) and Government Entities (Other than Federal entities) IRC 6721 & IRC 6722 |
||||
| Time returns filed/furnished | Not more than 30 days late | 31 days late – August 1 | After August 1 or Not at All | Intentional Disregard |
|---|---|---|---|---|
| Due 01-01-2020 thru 12-31-2020 |
$50 per return or statement - $556,500* maximum |
$110* per return or statement - $1,669,500* maximum |
$270* per return or statement - $3,339,000* maximum |
$550 per return or statement - |
| Due 01-01-2019 thru 12-31-2019 |
$50 per return or statement - $545,500* maximum | $100 per return or statement - $1,637,500* maximum | $270* per return or statement - $3,275,500* maximum |
$540* per return or statement - |
| Due 01-01-2018 thru 12-31-2018 |
$50 per return or statement - $536,000* maximum |
$100 per return or statement - $1,609,000* maximum |
$260* per return or statement - $3,218,500* maximum |
$530* per return or statement - |
| Due 01-01-2017 thru 12-31-2017 |
$50 per return or statement - $532,000* maximum |
$100 per return or statement - |
$260* per return or statement - $3,193,000* maximum |
$530* per return or statement No limitation |
| Due 01-01-2016 thru 12-31-2016 |
$50 per return or statement - $529,500* maximum |
$100 per return or statement - $1,589,000* maximum |
$260* per return or statement - $3,178,500* maximum |
$520* per return or statement - |
| Due 01-01-2011 thru 12-31-2015 |
$30 per return or statement - $250,000 maximum |
$60 per return or statement - $500,000 maximum |
$100 per return or statement - $1,500,000 maximum |
$250 per return or statement - |
Note: Increased penalty amounts may apply for certain failures in the case of intentional disregard. See IRC 6721(e)(2) and IRC 6722(e)(2).
| Small Businesses with Gross Receipts $5 Million or Less (*Average annual gross receipts for the most recent 3 taxable years) IRC 6721 & IRC 6722 |
||||
| Time returns filed/furnished |
Not more than 30 days late |
31 days late – August 1 | After August 1 or Not at All | Intentional Disregard |
|---|---|---|---|---|
| Due 01-01-2020 thru 12-31-2020 |
$50 per return or statement - $194,500* maximum |
$110 *per return or statement - $556,500* maximum |
$270* per return or statement - $1,113,000* maximum |
$550* per return or statement - No limitation |
| Due 01-01-2019 thru 12-31-2019 |
$50 per return or statement - $191,000* maximum |
$100 per return or statement - $545,500* maximum |
$270* per return or statement - $1,091,500* maximum |
$540* per return or statement - No limitation |
| Due 01-01-2018 thru 12-31-2018 |
$50 per return or statement - $187,500* maximum |
$100 per return or statement - $536,000* maximum |
$260* per return or statement - $1,072,500* maximum |
$530* per return or statement - No limitation |
| Due 01-01-2017 thru 12-31-2017 |
$50 per return or statement - |
$100 per return or statement - $532,000* maximum |
$260* per return or statement - $1,064,000* maximum |
$530* per return or statement - No limitation |
| Due 01-01-2016 thru 12-31-2016 |
$50 per return or statement - |
$100 per return or statement - $529,500* maximum |
$260* per return or statement - $1,059,500* maximum |
$520* per return or statement - No limitation |
| Due 01-01-2011 thru 12-31-2015 |
$30 per return or statement - $75,000 maximum |
$60 per return or statement - $200,000 maximum |
$100 per return or statement - $500,000 maximum |
$250 per return or statement - |
Penalties for not filing correct information returns (Code Section 6721) may apply if you:
- Don’t file a correct information return by the due date and a reasonable cause is not shown;
- File on paper when you were required to file electronically;
- Don’t report a Taxpayer Identification Number (TIN);
- Report an incorrect TIN; or
- Don’t file paper forms that are machine readable.
Penalties for not providing correct payee statements (Code Section 6722) may apply if:
- You don’t provide a correct payee statement by the applicable date and a reasonable cause isn’t shown;
- All required information isn’t shown on the statement; or
- Incorrect information is included on the statement.
For more information on penalties, information returns and payee statements, see General Instructions for Certain Information Returns (PDF) and General Instructions for Forms W-2 and W-3 (PDF).
The due date for Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, whether filed with the IRS on paper or electronically, remains March 15. Also, the requirement to furnish Form 1042-S to the recipient of the income remains due March 15. For more information on the penalties applicable for not filing a correct Form 1042-S, and /or for not providing the correct payee statement, refer to Penalties Related to Form 1042-S.
References
Public Law (P.L.) 113-295, Section 208
Public Law (P.L.) 114-27 Section 806 (PDF)