Late Filing Penalties for W-2 Forms and 1099-MISC Forms
How to Apply for an Extension of Time to File W-2s
The filing deadline for W-2s and 1099-MISC 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-MISC forms is January 31, 2020.
The deadline is for:
- Giving these reports to employees and non-employees, and
- Submitting the reports to the proper federal agency; Social Security Administration for W-2 forms and the IRS for 1099-MISC forms.
If you must file late, file as soon as possible to avoid additional fines and penalties.
Who Gets the Forms
W-2s must be given to employees and filed with the Social Security Administration, and 1099-MISC forms must be given to non-employees to whom you paid at least $600 or more during the tax year. File 1099-MISC forms with the IRS as well.
New Requirements for Filing an Extension Application for W-2s
In addition to changes in the filing deadlines, the IRS has changed the regulations for applying for an extension for filing W-2 forms. The extension application is not guaranteed and you must provide a detailed explanation for the extension request.
Requests must be submitted on IRS Form 8809 by the January 31 deadline. The extension is for 30 days.
Penalties for Late Filing
If you don't file a correct W-2 form by the due date and you can't show reasonable cause, penalties can apply for:
- Failing to time timely (by the due date)
- Failing to include all required information
- Filing using a paper form when you are required to e-file
- Reporting an incorrect Taxpayer ID number (TIN)
- Failing to report a Taxpayer ID number, or
- Failing to file paper forms that are readable by machine. (This means you must use a specific form of the W-2 with special red ink, not just a W-2 you copied from the internet.)
You don't have to include W-3 forms if you file W-2s online, but you might pay a penalty if you fail to file W-3 statements along with copies of employees' W-2s when you file by mail.
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 it can be proved that you intentionally disregarded the law.
The penalty amount is based on when you file. According to the IRS:
For filings due after December 31, 2019 (that is, during 2020), the penalty is $50 per W-2 form if you correctly file within 30 days of the due date. It's $110 per W-2 form if you correctly file more than 30 days after the due date but by August 1, and $270 per W-2 form if you file after August 1, if you don't file corrections or you don't file the forms.
Exceptions to the penalty 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. You must
Filing With the Social Security Administration
You can be liable for penalties if you fail to file Form W-3 with the SSA along with W-2s for all employees by the end of February for the preceding year. You can also be penalized if the forms are incorrect with errors or omissions.
You can avoid penalties if you file in a timely manner, by the due date, and include all required information on the form. Make sure you file on the correct form, not a photocopy, and that you have correct Social Security or tax identification numbers for employees. Check the spelling of surnames and that any and all monetary amounts are correct.
You must file electronically if you're submitting 250 or more W-2 forms.
Penalties for Small Businesses
Penalties are smaller 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. It's $15 for returns correctly filed within 30 days of the due date.
Using a payroll service provider does not relieve you of your responsibility to ensure that the W-2 forms are filed correctly and on time.
Penalties for Late Filing of 1099-MISC Forms
If you fail to file a 1099-MISC form by the due date, the penalty is also based on how late it is. The penalty is $30 if you correctly file within 30 days, and it increases to $60 per return if you file more than 30 days late but by August 1. It's $100 per return if you file after August 1 or you don't file at all.
You can also incur a separate penalty if you fail to provide 1099-MISC 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.