W2/1099 E-file Mandate

As discussed in our post on November 19, 2020, and on page 48 of the Tax Year 2020 edition of the  M+O=CPE Individual Tax Year-End Workshop Reference Book, the lower threshold for the e-file mandate for Forms W2 and 1099s was delayed by the Treasury Department for the 2020 tax year, and the threshold remained 250.

However, the IRS recently issued proposed regulations regarding the mandate.  If these proposed regulations are finalized, the mandate will apply to entities that are required to file 100 or more applicable forms (which includes the sum of all Forms W2 plus any type of Form 1099 required to be filed) for the 2021 tax year.  Those forms will be due in January 2022.  For the 2022 and later tax years, the threshold would drop to 10.  The tax year 2022 forms will be due in January 2023.

Practitioners should prepare for this requirement now by registering to electronically file Forms W2 and Forms 1099.  Information about registering and electronically filing Forms W2 is available at: https://www.ssa.gov/employer/. For Forms 1099, information is available at: https://www.irs.gov/e-file-providers/filing-information-returns-electronically-fire.