Electronic Filing Updates for Information Returns

Regulations section 301.6011-2 previously held that electronic filing was not required unless filing 250 or more returns in a calendar year. Each type of return was held separately, allowing the 250 threshold to apply separately to each type of form. For example, if you had 350 Forms 1099-MISC and 100 Forms 1099-INT to file, only the 350 Forms 1099-MISC would have to be filed electronically.

On February 23, 2023, Treasury Decision 9972 was published. The decision amended the previous regulations for electronically filing information returns. Beginning with forms filed during calendar year 2024, the threshold for information returns is lowered to 10. The new threshold is applicable to 2023 Forms W-2 and many Forms 1099 because they will be due January 31, 2024.

The decision also changes the calculation of returns that reach the threshold. Information returns will be calculated based on the aggregate of specified information returns.

For example, a company that needs to file eight Forms 1099-INT and two Forms W-2 will need to file all such forms electronically because the aggregate of the specified returns is 10.

To determine if information returns should be filed electronically, employers should add together their information returns and W-2s they must file.

Information returns to add together include: Form 1042-S, the Form 1094 series, Form 1095-B, Form 1095-C, Form 1097-BTC, Form 1098, Form 1098-C, Form 1098-E, Form 1098-Q, Form 1098-T, the Form 1099 series, Form 3921, Form 3922, the Form 5498 series, Form 8027, Form W-2G, and Forms W-2, W-2AS, W-2GU, W-2I, and Form 499R-2/W-2PR, collectively Forms W-2.

Corrected information returns, i.e. W-2C, should not be added when calculating the number of returns. They are treated separately.

The new electronic filing requirements represent a significant change for small businesses, so it is important to start planning ahead for the filing of these forms to make sure you have procedures in place to meet the electronic submission requirements.

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