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PATH Act Accelerates W-2 and 1099-Misc Filing Deadlines


7/27/16

Synopsis
 
The Protecting Americans from Tax Hikes Act (Path Act), which was signed into law last December, has accelerated the deadlines for certain information returns and statements relating to employee wages and non-employee compensation.
 
Specifically, the PATH Act modified the filing deadline for both paper and electronic versions of Forms W-2, W-3, and 1099-Misc to January 31 of the year following the calendar year to which such returns relate, beginning with forms filed in 2017. The purpose of the new deadline is to allow the IRS to match W-2s with tax returns as they are filed to minimize the potential for tax fraud and identity theft. Business entities will need to file 2016 Forms W-2, W-3 and 1099-Misc on or before January 31, 2017.
 
Prior Law
 
Previously, business entities had until January 31 to furnish Forms W-2 and 1099-Misc to individual recipients and had until the end of February to file these forms with the government. Electronic filers were granted an additional month, until the end of March, to file these forms with the government.
 
New Law
 
The new legislation not only requires that all Forms W-2 be filed with the Social Security Administration by January 31st but the W-2 forms must be provided to employees on the same January 31st due date. The new legislation also requires that all 1099-Misc forms be filed with the IRS by January 31, the same filing deadline that applies to furnishing the forms to vendors and independent contractors.
 
Penalties
 
Failure to comply with the new filing deadlines may expose a business to significant IRS penalties. The penalties apply for failure to timely file, failure to include all required information on a return, and for including incorrect information on a return.
 
Safe Harbor
 
Beginning with 2016 forms, the new legislation provides a safe harbor from penalties for failing to file correct forms and for failing to provide employees with correct statements. 
 
What Does CohnReznick Think?
While many businesses use payroll services for payroll, businesses often prepare 1099’s on their own so it’s important to be aware of the new deadlines to make sure that the information returns are filed on a timely basis.

Contact
 
For more information, please contact your CohnReznick tax professional.


Any advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues. Nor is it sufficient to avoid tax-related penalties. This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

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