IRS Drastically Expands Electronic Filing Requirement for 2023 Tax and Information Returns
Earlier this year, the Internal Revenue Service finalized regulations that significantly expand the mandatory electronic filing requirements. These new requirements mandate that almost all information returns (Forms W2, Form 1099, Form 1094 and 1095 etc.) filed on or after January 1, 2024, be filed electronically with IRS. Under the old rules, businesses were required to file information returns electronically if the number of forms for that type exceeded 250 returns. For example, if you had to file 300 Forms W2 for 2022 and you had to file 27 Forms 1099, the W2s had to be filed electronically, but the Forms 1099 could still be filed on paper.
However, under the new rules, electronic filing of 2023 information returns is required for all information returns if a business is required to file 10 or more information returns (regardless of type). This means that if your business is required to provide 7 Forms W2 and 4 Forms 1099 for 2023, both the W2s and 1099s must be filed electronically since the total is at least 10. The penalties for not filing information returns electronically when required are significant.
The IRS has a new and free online portal for filing these returns electronically for 2023 called the Information Returns Intake System (IRIS). According to IRS, IRIS is secure and does not require any special software to use. This free service is available to filers of any size. More information about IRIS can be found at https://www.irs.gov/filing/e-file-forms-1099-with-iris
Maillie LLP will continue to prepare Forms 1099 and file them electronically for clients that do not wish to take advantage of the IRS IRIS online software for filing these returns electronically. In addition, many accounting software packages including Quickbooks, have the ability to create 1099s and also file them electronically through Intuit. Using your accounting software or the free IRS IRIS online system to prepare and file these forms for 2023 may be more efficient ways for your business to meet the new requirements.
If you have any questions, please contact your Maillie representative.
