Accelerated Due Date for 2016 W-2 Forms

Employers are required to provide all employees with a W-2 form by January 31 following the end of the calendar year. This requirement is met if the employer mails W-2 forms to its employees by January 31.

For tax years through 2015, employers had until the end of February to file their W-2 forms with the IRS, along with the Form W-3 transmittal, if paper filing; they had until the end of March to file these forms if filing electronically.

So, what has prompted the earlier deadline? Identity theft on income tax returns is a rampant national problem affecting millions of taxpayers. While the IRS has instituted various filters to try to catch fraudulent tax returns before issuing erroneous refunds, it is not always successful. Part of the problem is that the fraudulent returns routinely report wages and withholding taxes and are typically filed early in the filing season. This occurs before the IRS is in a position to reconcile the wage and withholding information to W-2 forms filed.

The Protecting Americans from Tax Hikes (PATH) Act of 2015 was enacted in December 2015. While its primary purpose was to retroactively reinstate expired tax extender provisions and make several tax extender provisions permanent, included in this bill was a provision changing the due date for the filing of W-2 forms by employers to January 31 following the close of the calendar year. The new due date is the same regardless of whether the employer files W-2 forms on paper or electronically.

One 30-day extension for filing W-2 forms may be requested by submitting Form 8809, Application for Extension of Time to File Information Returns. The completed Form 8809 must include a detailed explanation of why the employer needs additional time and the IRS will only grant the extension for extraordinary circumstances or a catastrophe.

Various 1099 forms had the same due dates as W-2 forms for years through 2015. Similar to the new due date for W-2 forms, Form 1099-MISC, Miscellaneous Income, with an entry in box 7 for nonemployee compensation, must also be filed by January 31 of the following year beginning with 2016 forms. The due date for a Form 1099-MISC with entries other than box 7 (i.e. rents in box 1) is unchanged from prior years. And the due date for all other 1099 forms continues to be the end of February if paper filing, and the end of March if electronically filing.

Obtaining an extension is considerably easier for Form 1099-MISC that reports nonemployee compensation. An automatic 30-day extension will be granted by completing Form 8809. One additional 30-day extension may also be requested. However, similar to requesting an extension to file W-2 forms, it must be shown that extenuating circumstances have prevented filing by the original due date. Both W-2 and Form 1099-MISC recipients are still required to be furnished with these forms by January 31, regardless of when the issuer ultimately files them with the IRS.

The due date for filing these forms with state and local taxing authorities varies greatly. Presumably, employers filing W-2 forms and businesses filing 1099-MISC forms  reporting nonemployee compensation would file the forms with the IRS and all state and local taxing authorities at the same time, whether paper filing or filing electronically. Therefore, this should not be an issue.