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New IRS 1099 Electronic Filing Requirements

Earlier this year, the Internal Revenue Service finalized regulations that expanded the mandatory electronic filing of information returns (e.g. W-2, 1099-NEC, 1099-MISC, 1099-DIV, etc.). These new requirements state that filers of 10 or more applicable information returns for a calendar year, must file electronically with the IRS.  The requirement goes into effect January 1, 2024.  This means 2023 information returns issued in 2024 must follow the new 10 or more threshold instead of the previous threshold of 250 or more. Please be aware of this significant change that may affect your business as the 1099 tax filing deadline approaches.

The electronic filing requirement of 10 or more information returns applies to a variety of information returns. Some of the most used information returns that are subject to the 10 or more threshold include Form W-2, 1099-NEC, 1099-MISC, and 1099-DIV.  See the IRS website for a comprehensive list of information returns that are potentially subject to electronic filing.

An important change with the new requirements is that filers must now aggregate all information return types covered by the regulation to determine whether they meet the 10-return threshold. The 10-return threshold does not apply to each form type separately.  For example, if your business issues 5 W-2’s, 3 1099-NEC’s, and 2 1099-MISC, you would meet the 10-return threshold.  Therefore, you are required to file all these forms electronically.

The IRS created a new platform called IRIS (Information Returns Intake System) that allows businesses to electronically file 1099’s online at no cost.  A business must be approved by the IRS in order to use the IRIS platform.  This approval process may take a significant amount of time. To avoid any last-minute complications, we recommend that you apply for IRIS access sooner rather than later. You can find details about e-filing through IRIS here.

DISCLAIMER: This blog is provided for informational purposes only and is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.

Presentation of the information in this article does not create nor constitute an accountant-client relationship. While we use reasonable efforts to furnish accurate and up-to-date information, the evolving landscape surrounding these topics is supported by regulations or guidance that are subject to change.


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