Forms W-2 and l099-MISC.
When a business pays nonemployee compensation aggregating to $600 or more to a single payee in the tax year, the business must file an information return using Form 1099-MISC (Miscellaneous Income) to report the payments. Similarly, employers must report wages paid to employees on Form W-2 (Wage and Tax Statement). Before the PATH these forms were required to be supplied to payees and employees by January 31 of the following year, and copies were required to be filed with the IRS and the Social Security Administration (SSA) by the last day of February, or by March 31 if flled electronically.
The PATH Act accelerated the due dates for filings with the IRS and the SSA. Starting with returns relating to calendar-year 2016 (which will be filed in 2017), the due date for IRS and SSA filings has moved up to January 31 of the following year, and the later March 31 due date for electronic fllings is no longer available. (See IRC Secs. 6071 and 6402.) So, 2016 Forms 1099-MISC and W-2 will need to be filed January 31, 2017, the same date that the forms must be provided to payees and employees.
Practice Tip: It is important to make sure your clients are aware of and comply with these new filing dates. Failure to do so can result in significant penalties. Penalty amounts are based on the duration of the delinquency, whether the delinquency was intentional, and the size of the offending taxpayer. However, for 2016, penalties begin at $50 per return, with a maximum of $532,000 per year or $186,000 for small employers, when the delinquency is corrected within 30 days after the information return due date and they go up from there.
A small business is one with average annual gross receipts for the most recent three tax years that don't exceed $5 million. (See IRC Sec. 6721 and Rev. Proc. 2015-53.)