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W-2 and 1099 Deadlines for Business – Important Dates & Penalties

Written by Stephanie Fortune

Hi, My name is Stephanie! I am passionate about helping small and medium-sized businesses empower themselves and their employees while working to achieve their strategic goals! By reviewing your unique business needs, we implement Payroll, Insurance, and HR solutions that are right for you!

January 31, 2023

Does your company work with contractual workers too? Are you looking for a ‘W-2 and 1099 deadlines’ for your business? 

Companies hiring non-employees/contract workers or employees must provide them with complete tax information. They must provide the necessary W-2 form to their employees and 1099 forms to contractual employees. 

This article throws light on the deadlines of these forms, and the penalties you might face if you do not file them within the same.

What Does a W-2 Form Include?

This form evaluates an employee’s compensation for the previous tax year (January 1st to December 31st). W-2 Form consists of:

  • Total compensation for an employee
  • Social Security wages
  • Medicare wages
  • Number of tips
  • Certain amounts were withheld for social security, medicare, and federal and local, and state taxes for that year.

Apart from these the form also consists of information regarding:

  • An employee’s contribution to retirement plans sponsored by employers
  • Information on pension plans
  • Employer-sponsored health plans and coverages
  • Moving expense reimbursements
  • Certain qualified adoption expenses

Therefore, keeping all these in mind if you find an employee in your organization who earned compensation during the taxable year, you need to definitely file a W-2 form.

What Does a 1099 Form Include?

1099 form is meant for non-employees and there are many Internal Revenue Service tax reporting forms under the 1099 section. 

Here below is when you must use this non-employee compensation form:

  • You must use this form when you are paying freelance employees, professionals, contractors, and independent workers.
  • In addition, you need to furnish this form if your organization has made payments to any business or an individual of a certain amount for services they provided to your organization during that particular year.

What Are the Deadlines for W-2 and 1099 Forms?

Here are the due dates for filing these forms:

  • Whether you are filing it through electronic mode or by paper, you must provide your workers/employees with their W-2 forms and file them with the Internal Revenue Service by 31st January. 
  • However, if you made a payment to the freelancers and the independent professionals in the previous year, you need to furnish Form 1099-NEC to them and Internal Revenue Service by 31st January.
  • Similarly, if you require issuing a 1099 form to someone to evaluate other income payments, awards, or prizes, you must provide a copy of this form to the person by 31st January again.
  • Moreover, organizations still have time until February 2023 to file the same with Indian Revenue Service if they file via paper.
  • If they file through an electronic mode of payment, they have time till the 31st of March for that financial year.

Now, let us find out if we can file an extension.

How to File a W-2 or a 1099 Extension?

In case you are unable to meet the January 31st due date for both of these forms, you have the provision of filing an extension application. Here is what you can do:

  • Your company can request a 30-day extension period to file these forms where you need to submit a proper extension application by 31st January.
  • There is no provision for getting an automatic extension and you can also not file an extension through electronic mode.
  • You need to mention the exact reason for the extension. Further, the application must have a signature of an authorized person in your company.
  • You must properly include the name of the payer, address, and tax ID details. Also, mention the type of return as well.

What Are the Consequences of Not Filing W2 and 1099 Forms?

Eventually, if you fail to file these forms within the deadline or if you are filing incorrect or incomplete forms, you will have to pay heavy fines. Penalties and fines depend on the days you are late to file them and are imposed on each form. 

It includes $50 if you file within 30 days before the due date, $110 if more than 30 days but before August 1 and $280 if after that. However, if the form was not filed intentionally this fine increases to $560 for each form. 

Refer to the above information to understand the requirement of W2 and 1099 forms in a business. Also, know the deadline to file the same and more. Following the deadline will relieve you of high penalties. Besides, you can contact us for HR solution that is in case you are a start-up and still learning how the business work. If you wish to know more about it, please explore our blog section too.

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