Extensions and Late Filing Penalties for Forms W-2 and 1099-NEC

How to Apply for an Extension to File Forms W-2 and 1099-NEC

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Employees should receive Form W-2 and nonemployees should receive Form 1099-MISC by January 31 for the preceding tax year, but Form 1099-MISC changes for tax year 2020.

Beginning in 2020, IRS Form 1099-NEC segregates nonemployees from other types of entities who will still receive Forms 1099-MISC. The filing rules for Forms 1099-MISC and 1099-NEC are pretty much the same, however. The only thing that's really changed is which payees should receive which form. Only nonemployees should receive Form 1099-NEC.

Due Dates for W-2s and 1099 Forms

The filing deadline for W-2s and 1099-NEC forms to report taxable income for the current calendar year is January 31 of the following year. For example, the deadline for 2019 W-2s and 1099 forms was January 31, 2020.

January 31, 2021, is the deadline for giving 2020 Forms 1099-NEC to nonemployees, and for giving Copies B, C, and 2 of 2020 Forms W-2 to employees.

You must file W-2 Forms with the Social Security Administration (SSA) and 1099 forms with the IRS by the same date. 

Extension Applications for W-2s

Your business can request one 30-day extension of time to file its Forms W-2 with the Social Security Administration. You must submit a complete extension application in writing on IRS Form 8809 by January 31. You can't file Form 8809 electronically for a W-2 extension request; it must be mailed physically.

Form 8809 covers W-2s and all 1099 forms. These information forms don't require separate extension requests.

The IRS says it will grant requests for extensions "in limited cases for extraordinary circumstances or catastrophe."

You can also request one 15-day extension to furnish W-2 forms to your employees. You must submit the request in writing by January 31 to:

Internal Revenue Service
Attn: Extension of Time Coordinator
240 Murall Drive, Mail Stop 4360
Kearneysville, WV 25430

Include your business name and address and your Employer ID Number, as well as a statement that you're requesting an extension of time to furnish W-2 forms to employees. Tell the IRS the reason for the delay. Your authorized agent must sign the request.

Extension Applications for 1099 Forms

You might be able to get an extension for filing Form 1099-NEC with the IRS by completing IRS Form 8809. Extension requests for reporting nonemployee income in Box 1 of Form 1099-NEC must be submitted by paper, not online. Mail the form to:

Department of the Treasury
Internal Revenue Service Center.
Ogden, UT 84201-0209

You can also request up to a 30-day extension for giving 1099-MISC forms to recipients who will still receive those in 2020, although not for Forms 1099-NEC. Be sure your letter is postmarked by the January 31 due date and send the letter to:

Internal Revenue Service
Attn: Extension of Time Coordinator
240 Murall Drive, Mail Stop 4360
Kearneysville, WV 25430

Include your payer name, address, and tax ID number. State the type of return you're requesting an extension for, and that you're submitting a request for providing statements to employees. Explain the reason for the delay and have your authorized agent sign the form.

There is no automatic extension for filing W-2 forms with the SSA or for filing Forms 1099-NEC.

What About Forms W-3 and 1096?

The W-3 and 1096 forms are the summary and transmittal forms that you must use when you're filing paper returns with the SSA or the IRS. You don't need these forms if you file electronically.

Penalties for Late Filing of W-2 Forms

Penalties can apply if you don't file a correct W-2 form by the due date and you can't show reasonable cause.

You don't have to include W-3 forms if you file W-2s online, but you might pay a penalty if you file by mail and you don't file W-3 statements with the SSA along with copies of employees' W-2s.

Penalties can also be imposed for statements that are incomplete or inaccurate. You might avoid the penalties if you can show "reasonable cause" for your failure, but don't count on the SSA or IRS accepting your excuse. The penalties are higher if your failure is willful, or if the agency can prove that you intentionally disregarded the law.

Penalties are imposed per form, so if you misfiled 250 forms, you'll pay the penalty for each form.

Exceptions to these penalties include:

  • What the IRS calls "inconsequential errors or omissions"
  • Reasonable cause, if you can show that failure was due to an event beyond your control or for "significant mitigating factors"

Penalties for Late Filing of 1099-NEC Forms

Penalties may be assessed for mishandling 1099-NEC forms, such as:

  • Failing to file by the due date
  • Failing to include all required information
  • Including incorrect information
  • Filing by mail when you were required to file electronically
  • Failing to report a taxpayer ID or filing an incorrect one

You can also incur a separate penalty if you fail to provide 1099-NEC statements to payees on time. The amount is based on when you furnish the correct statement.

Returns must be complete and correct to avoid penalties.

How Much Will You Pay?

The penalty is $50 per W-2 form or 1099-NEC form if you correctly file within 30 days of the due date for filings due after December 31, 2019, including the January 31, 2020 due date. It's $110 per form if you correctly file more than 30 days after the due date but by August 1. This increases to $270 per form if you file after August 1, if you don't file corrections or you don't file the forms.

Using a payroll service provider does not relieve you of your responsibility to ensure that the W-2 forms and 1099-NEC forms are filed correctly and on time.

Penalties are less for small businesses, those with $5 million or less in average annual gross receipts for the three most recent tax years. The amount of the penalty is based on when you file.

The information contained in this article is not tax or legal advice and is not a substitute for such advice. State and federal laws change frequently, and the information in this article may not reflect your own state’s laws or the most recent changes to the law. For current tax or legal advice, please consult with an accountant or an attorney.