Mark the calendar: Important backup withholding deadlines

IRS Tax Tip 2022-05, January 10, 2022

Some businesses and other payers take backup withholding from payments they made to certain people. These entities should remember their upcoming filing deadlines.

What is backup withholding?

Business and other payers generally don't withhold taxes from payments reported on Forms 1099 and W-2G. There are, however, situations when a payer must withhold 24% of the payment to ensure the IRS receives the tax due on this income. This is known as backup withholding. If a payer does backup withhold, they must deposit the withholding with the IRS. Taxpayers should review Publication 15, Employer's Tax Guide, for more information on making deposits.

Form 945, Annual Return of Withheld Federal Income Tax

Businesses and other payers must report their liability for backup withholding and any other federal income tax withheld from nonpayroll payments on Form 945, Annual Return of Withheld Federal Income Tax. The last day for filing Form 945 for tax year 2021 is Monday, January 31, 2022. However, if the payer made deposits on time and in full, the last day for filing is Thursday, February 10, 2022. For more information on making federal tax deposits, see section 11 of Publication 15 PDF.

Information returns

The information returns listed below are used to report backup withholding for tax year 2021. Except for Form 1099-NEC., they're generally due to the IRS on, Monday, February 28, 2022, for paper filers and Thursday, March 31, 2022 for electronic filers.

These information returns are:

Taxpayers should review Publication 1220 PDF for help electronically filing information returns.

Payers must also furnish corresponding information returns to the payees by the due dates PDF. Payers should review the Guide to Information Returns, beginning on page 26 of the General Instructions for Certain Information Returns.

Filing Due Date for Form 1099-NEC

There's a different filing due date PDF for Form 1099-NEC. The Form 1099-NEC must be filed with the IRS by Monday, January 31, 2022. This due date applies to both paper and electronically filed returns.

Use Same Employer Identification Number on All Forms

Information returns and Form 945 must be filed with the same employer identification number (EIN). Filing returns with inconsistent EINs may cause processing delays and possibly the assessment of penalties.

Information Return Filing Extensions

A payer can request a 30-day extension to file any of the information returns listed above by filing Form 8809, Application for Extension of Time to File Information Returns. An extension is usually granted automatically. However, the IRS does not automatically grant an extension for Form 1099-NEC. Payers who need a 30-day extension to file Form 1099-NEC must meet one of the criteria listed on line 7 of Form 8809. An additional 30-day extension maybe available as described in instructions to the Form 8809.