Will you be REQUIRED to file your W-2’s and 1099 electronically in 2024? Chances are, yes.

Published on Thursday, January 4, 2024

Starting in 2024, if you have 10 or more informational returns (W-2,1099-NEC,1099-MISC, etc.), you will be required to file them electronically. This is a significant increase from the 250 returns threshold in prior years, and the penalties for incorrect filing can be costly.

The IRS receives billions of returns each year, most of which are electronic. But for the millions of returns that are still paper filed, these new rules are intended to free up staff and resources; improve efficiency; and reduce unnecessary costs associated with paper filing.

The things you NEED to know about the rule change:

1. The e-filing threshold drops to 10! Under the previous rule, the IRS only required you to e-file if you had over 250 returns. If you are still hand-writing your 1099’s, you many need to change your process.
2. Include ALL returns in the new threshold number. Under the previous rules, the 250-threshold applied to each information return type. For example 1099-NEC is one return type, W-2 is another, and they each had their own 250 return threshold. The NEW rules requires you to aggregate all information returns.
3. You must e-file if the sum of all types of returns is 10 or more. If you have 8 W-2’s and 3 1099’s, you will now be required to e-file.

But don’t worry -- here are next action steps. The IRS has created a new, free online portal to help businesses e-file their Forms 1099, Information Returns Intake System (IRIS). You will continue to file your W-2’s online with the Social Security Administration. It’s important to remember that you are NOT required to file a Form 1099-NEC if you paid an individual or business for services totaling less than $600, and in most cases, the same applies to 1099-MISC.

If you have previously been paper-filing your information returns and are now required to e-file, apply today to the Information Returns Intake System (IRIS) to obtain a Transmitter Control Code (TCC) to electronically file all 1099 forms. Please be advised that the typical processing time for the IRS for these applications is 45 business days and the filing deadline for most 1099 forms is January 31, 2024.

If you have any questions or would like our firm to assist your business with electronic filing on information returns, we are here to help! Contact us today and we can help you navigate your filing options.

- BA Harris Team