Background
In an effort to combat fraud, The Protecting Americans from Tax Hikes (PATH) Act of 2015 was passed by Congress and signed by President Obama in December. The act revises the filing deadline for Form W-2 and certain types of Form 1099. The filing changes will begin in 2017.
This bill was a very important step in the right direction on the path to tax reform. The bill includes program integrity provisions that affect refundable tax credits and are projected to save $7 billion over the next ten years by reducing abuse and improper payments in refundable credit programs.
What’s Changing?
Until now, employers had two dates to keep in mind when remitting W-2’s:
- January 31st: To provide employee copies
- February 28th: For paper filings submitted to the Social Security Administration (March 31 for electronic filings)
One Filing Deadline
Beginning with 2016 forms, employers will now have one filing deadline for all Federal W-2s, January 31st. This is true for both employee and agency copies, or whether filing paper or electronic returns.
Form 1099-Misc
What about Form 1099-Misc? The new January 31 deadline applies to certain types of 1099s.
If you’re filing Form 1099-Misc and reporting amounts in Box 7: Nonemployee Compensation, then you will need to meet the new filing deadline of January 31.
If you don’t have amounts in Box 7, then the deadline remains February 28 for paper filings or March 31 for electronic filings.
Impact for Employers
With this new deadline, it’s important that employers be well prepared to complete year-end tasks. This means:
- Verifying the accuracy of employee information
- Reporting and submitting any year-end adjustments as soon as possible
- Reviewing year-end totals for any discrepancies
If you have any questions on these changes, please feel free to Contact Us at any time, or give us a call at 586.468.0200!