Businesses that hire employees and non-employee contract workers must give them end-of-year tax information, with W-2 forms going to employees and 1099-NEC forms to non-employees. This information also must be filed with the appropriate federal agencies.
This article gives you information on the deadlines for these forms, what to do if you need an extension, and penalties for not filing the forms by the deadlines.
- End-of-year income tax report forms W-2 for employees and 1099-NECs for non-employees are due to recipients by January 31 of the year after the tax year.
- January 31 is also the deadline for filing W-2s with the Social Security Administration (SSA) and 1099-NECs with the Internal Revenue Service (IRS).
- Penalties are applied for each form that's late and for not filing the form correctly.
- You may be able to get a filing extension on filing a W-2 or 1099-NEC form if you can show a exceptional circumstances, but it's not automatic.
Deadlines for W-2s and 1099 Forms
Employers use W-2 and 1099-NEC to report taxable income of employees and non-employees for the year. The W-2 form reports income, withholding, state taxable income, and other information to the Social Security Administration. The 1099-NEC form reports payments to non-employees, including independent contractors, freelancers, and professionals, to the Internal Revenue Service (IRS).
January 31 is generally the deadline for giving Form 1099-NEC to non-employees, and for giving Copies B, C, and 2 of Form W-2 to employees.
January 31 is also the deadline for filing W-2 Forms with the Social Security Administration (SSA) and 1099 forms with the IRS.
The exact deadline may change in a year if the deadline falls on a weekend or holiday. In this case, the deadline is the next business date. For example, if January 31 falls on a Sunday, the deadline would be Monday, February 1.
Don't use IRS Form 1099-MISC to report payments to non-employees. This form is no longer used for that purpose, beginning with the 2020 tax year.
How To File a W-2 or 1099-NEC Extension
If you can't meet the January 31 deadline for W-2 or 1099-NEC forms, you must file an extension application. There are separate processes for extensions on reporting to the IRS/SSA and for extensions on giving forms to recipients.
Extension for Filing With the IRS or SSA
Your business can request one 30-day extension of time to file Forms W-2 and Form 1099-NEC. You must submit a complete extension application in writing on IRS Form 8809 by January 31.
You can't get an automatic extension for filing 1099-NEC and W-2 forms, and you can't file the the extension application electronically. To have your extension application approved, it must be signed by the person authorized to sign for your company and you must certify your need for an extension. The IRS will only grant an extension of time to file in extraordinary circumstances or catastrophe.
Extension requests for Forms W-2 and 1099-NEC must be mailed to:
Department of the Treasury
Internal Revenue Service Center
Ogden, UT 84201-0209
Extension for Giving Forms to Recipients
You can request up to a 30-day extension for giving 1099-NEC or W-2 forms to recipients. Fax (don't mail) a letter by January 31 to:
Internal Revenue Service Technical Services Operation
Attn: Extension of Time Coordinator
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.
Late Filing Penalties for W-2s and 1099-NECs
Penalties can apply for failing to file W-2 forms or 1099-NEC forms by the deadline or for filing incorrect or incomplete forms. Penalties are based on the lateness of the form and are imposed per form, so if you misfiled 250 W-2 forms, you'll pay the penalty for each form.
Here are some common penalties:
- Not filing forms by the due date
- Failing to include all required information or including incorrect information
- Reporting with an incorrect or missing taxpayer ID number (TIN)
The W-3 and 1096 forms are the summary and transmittal forms that you must use when you're filing W-2 forms and 1099-NEC forms by mail. You don't need these forms if you file electronically, but you may be penalized for not filing these transmittal forms if you file by mail.
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.
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"
The penalties are determined per information return (W-2 or 1099-NEC). It's $50 for each form filed late if you correctly file within 30 days of the due date. It's $110 per form if you correctly file more than 30 days after the due date but by August 1. For tax year 2021 (and 2022), this increases to $280 per form if you file after August 1, if you don't file corrections or you don't file the forms. The penalty for intentional disregard for tax year 2021 is $560 for each form.
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 Bottom Line
Payees depend on the information in W-2 and 1099-NEC forms to prepare their taxes, so it's important to get the information to them by the deadline. It's also a good idea to give them the forms early in the month to give time to make changes before the January 31 filing deadline.
If you find you have missed the deadline for filing with the IRS or Social Security Administration, file as soon as possible to reduce penalties and interest.
You can use a payroll processing service or online payroll software to prepare W-2 and 1099-NEC forms, but 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.
Frequently Asked Questions (FAQs)
Who must file forms 1099-NEC and W-2?
Any business that has employees must keep track of their earnings, along with federal and state income tax withholding, for the year and report those amounts to the employee and to the Social Security Administration using IRS Form W-2.
If your business hires outside contract workers or you pay service providers, you must keep track of your payments to them. Then you must report the total payments to each contractor and to the IRS using IRS Form 1099-NEC if you paid them $600 or more for the year.
Where do I send my 1099 late filing fee?
The IRS will send you a notice that you have a penalty due. There's no interest if you pay in full within the required time. You can pay online directly through the IRS website, from your bank account, or by using a debit/credit card or digital wallet (like PayPal, for example). There may be processing charges for some types of payments.
You can also pay by mailing a check or money order to the IRS. See the instructions on the IRS notice for the mailing address or see this article on where to send balance due taxes, based on your state.