Are you a business that electronically files your W-2s and 1099s? If not, you might have to start electronically filing this coming January due to a new IRS electronic filing threshold.
In February 2023, Regulation section 301.6011-2 was amended by Treasury Decision 9972, impacting the electronic filing of certain information returns starting in January 2024. Under the new rules, you must electronically file if you have a total of 10 or more information returns. This threshold was previously 250 information returns.
This new threshold is effective for 2023 Forms W-2 and 1099s as they are required to be filed in 2024.
You must aggregate almost all information return types when determining if you meet the threshold. This means you must add together your W-2s, 1099s, and other information returns and electronically file if the sum is 10 or more.
For example, if your small business had six employees and you also hired four independent contractors during the calendar year, resulting in the need to file six Form W-2s and four Forms 1099-NEC, you would be required to electronically file these forms as the total number of information returns you need to file is 10.
A complete list of the information type returns that must be added together for determining if you are at the threshold for electronic filing is as follows:
- Form W-2
- Form 1099 Series (Including 1099-NEC and 1099-MISC)
- Form 1042-S
- Form 1094 series
- Form 1095-B
- Form 1095-C
- Form 1097-BTC
- Form 1098
- Form 1098-C
- Form 1098-Q
- Form 1098-T
- Form 3921
- Form 3922
- Form 5498 series
- Form 8027
- Form W-2G
Amended returns do not count toward the 10-return threshold. However, amended returns should be filed in the same format as the original. If you needed to electronically file the original form, you should electronically file the corrected form.
If you now need to start electronic filing your information returns under the amended regulation, you have a few different options:
- You can file the Forms W-2 yourself with the Social Security Administration and you can file Forms 1099 with the IRS using their online portal known as IRIS (Information Returns Intake System).
- Reach out to your payroll service provider to handle W-2 and 1099-NEC filings on your behalf.
- Reach out to your accountant for assistance on electronically filing the information reports – we are here to help!
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