Employers and small businesses need to be aware of new 2016 return due dates for returns prepared in 2017, as well as significantly increased penalties for filing incorrectly.
Deadlines at a Glance
**The deadline for filing the employer copies of 2016 Forms W-2 with the Social Security Administration has been changed to January 31, 2017
**The deadline for filing the employer copies of some 2016 Forms 1099-MISC with the IRS has also been changed to January 31, 2017
**If you would like Geffen Mesher to prepare your payroll reports or Form 1099s for the tax year 2016, we will need your information no later than January 15, 2017
Individual returns – due April 15 (no change)
Calendar Year S Corporations (Form 1120S) – due March 15 (no change)
Calendar Year Partnerships (Form 1065)
- March 15 is the new due date (was April 15)
- September 15 is the new extended due date
Calendar Year C Corporations (Form 1120)
- April 15 is the new due date (was March 15)
- September 15 is the extended due date
Combatting Fraudulent Returns
In order to combat the escalation of fraudulent returns being filed, there is a provision in the Consolidated Appropriations Act to accelerate the filing deadline for employer copies of Forms W-2/1099-MISC toJanuary 31 of the following year (previously February 28or March 31). Therefore, for all 2016 Forms W-2 and Form 1099-MISC, that report “Nonemployee Compensation” in Box 7, must be filed with SSA or the IRS on or before January 31, 2017. All W-2s and Form 1099s must be made available to the employee or contractor on or before January 31, 2017 (with the exception of brokerage statements).
Note: On November 18, 2016, the IRS extended the 2017 due date for providing 2016 health coverage information forms to individuals. Insurers, self-insuring employers, other coverage providers, and applicable large employers now have until March 2, 2017 to provide Forms 1095-B or 1095-C to individuals, which is a 30-day extension from the original due date of January 31. The due dates for filing 2016 information returns with the IRS remain unchanged for 2017. The 2017 due dates are February 28 for paper filers and March 31 for electronic filers. (ACA Information Center for Tax Professionals Link)
Oregon
Oregon’s due date for filing W-2s and 1099s is the same as the federal due date, January 31. (Reminder: Oregon requires ALL W-2s be electronically filed with the ODR through their iWire system or your payroll software. They will not accept any paper filed forms.
Required 1099s are the: 1099-G, 1099-MISC, 1099-R and W-2G if you file more than 10 of one type of form.
Extension of Time to File
Extension of time to file will only be granted in extraordinary circumstances or catastrophe. If you believe you qualify, you MUST complete and file Form 8809, Application for Extension of Time to File Information Returns, including a detailed explanation of why you need additional time and signed under penalty of perjury. This must be filed as soon as you know an extension of time to file is necessary (not before January 1), but no later than the due date of the return.
Penalties Have Doubled (updated Oct 26, 2016, per IRS website)
Beginning with the 2016 tax year, the due dates for filing Forms W-2 and W-3 with SSA will be January 31 of the following year, whether you file using paper forms or electronically. Form 1099-MISC will be due to the IRS by January 31 of the following year when you’re reporting Non-Employee compensation payments in box 7. Otherwise, file by February 28 if filing by paper, March 31 if filing electronically.
Employers must furnish Copy B and any other applicable copies of information returns to the employee by January 31 of the following year.
The penalty rates and maximums for failure to file correct information returns and/or to furnish correct payee statements, are reflected in the following two tables (*-as adjusted for inflation):
Large Businesses with Gross Receipts of More Than $5 Million and Governmental Entities
| Time returns filed/furnished | Returns due 01-01-2011 thru 12-31-2015 | Returns due 01-01-16 thru 12-31-2016 | Returns due 01-01-17 thru 12-31-2017 |
| Not more than 30 days late (by March 30 if the due date is February 28) | $30 per return/ $250,000 maximum | $50 per return/ $529,500* maximum | $50 per return/ $532,000* maximum |
| 31 days late – August 1 | $60 per return/ $500,000 maximum | $100 per return/ $1,589,000* maximum | $100 per return/ $1,596,500* maximum |
| After August 1 or Not At All | $100 per return/ $1,500,000 maximum | $260* per return/ $3,178,500* maximum | $260 per return/ $3,193,000* maximum |
| Intentional Disregard | $250 per return/ No limitation | $520* per return/ No limitation | $530* per return/ No limitation |
Small Businesses with Gross Receipts $5 Million or Less
| Time returns filed/furnished | Returns due 01-01-2011 thru 12-31-2015 | Returns due 01-01-16 thru 12-31-2016 | Returns due 01-01-17 thru 12-31-2017 |
| Not more than 30 days late (by March 30 if the due date is February 28) | $30 per return/ $75,000 maximum | $50 per return/ $185,000* maximum | $50 per return/ $186,000* maximum |
| 31 days late – August 1 | $60 per return/ $200,000 maximum | $100 per return/ $529,500* maximum | $100 per return/ $532,000* maximum |
| After August 1 or Not At All | $100 per return/ $500,000 maximum | $260* per return/ $1,059,500* maximum | $260 per return/ $1,064,000* maximum |
| Intentional Disregard | $250 per return/ No limitation | $520* per return/ No limitation | $530* per return/ No limitation |
The amount of the penalty is based on when you file the correct information return or furnish the correct payee statement. A penalty for failure to file a correct information return is separate from the penalty for failure to furnish the correct payee statement. For example, if you fail to file a correct Form 1099-MISC with the IRS and don’t provide a correct Form 1099-MISC statement to the payee, you may be subject to two separate penalties.
Oregon may assess penalties of up to $25,000 for not filing electronically, filing incorrect W-2s or filing late. The last two years Oregon was willing to waive the penalty if you immediately complied with the filing requirement. However, Oregon has stated that they will no longer waive the penalty and will now enforce collecting the funds.
Important Note:
For a tax year under audit and 1099s were not filed, the IRS has taken the position that they will disallow the expense. This is potentially a significant increase in tax to either the entity and/ or the pass-through individual taxpayer. Therefore, it has become increasingly important that due diligence is done in respect to reporting requirements.
Please contact your Geffen Mesher advisor if you have questions or concerns.
