IR-2016-143, Oct. 28, 2016
WASHINGTON
— The Internal Revenue Service today reminded employers and small businesses of
a new Jan. 31 filing deadline for Forms W-2. The IRS must also hold some
refunds until Feb. 15.
A new federal law, aimed at making it easier for the IRS to detect
and prevent refund fraud, will accelerate the W-2 filing deadline for employers
to Jan. 31. For similar reasons, the new law also requires the IRS to hold
refunds involving two key refundable tax credits until at least Feb. 15. Here
are details on each of these key dates.
New Jan. 31 Deadline for
Employers
The Protecting Americans
from Tax Hikes (PATH) Act, enacted last December, includes a new requirement
for employers. They are now required to file their copies of Form W-2, submitted to the Social
Security Administration, by Jan. 31. The new Jan. 31 filing deadline also
applies to certain Forms 1099-MISC reporting non-employee compensation such as
payments to independent contractors.
In the past, employers
typically had until the end of February, if filing on paper, or the end of
March, if filing electronically, to submit their copies of these forms. In
addition, there are changes in requesting an extension to file the Form W-2.
Only one 30-day extension to file Form W-2 is available and this extension is
not automatic. If an extension is necessary, a Form 8809 Application for Extension of Time to
File Information Returns must be completed as soon as you know an
extension is necessary, but by January 31. Please carefully review the
instructions for Form 8809, for more information.
"As tax season
approaches, the IRS wants to be sure employers, especially smaller businesses,
are aware of these new deadlines," said IRS Commissioner John Koskinen.
"We are working with the payroll community and other partners to share
this information widely."
The new accelerated deadline
will help the IRS improve its efforts to spot errors on returns filed by
taxpayers. Having these W-2s and 1099s earlier will make it easier for the IRS
to verify the legitimacy of tax returns and properly issue refunds to taxpayers
eligible to receive them. In many instances, this will enable the IRS to
release tax refunds more quickly than in the past.
The Jan. 31 deadline has
long applied to employers furnishing copies of these forms to their employees
and that date remains unchanged.
Some Refunds Delayed Until
at Least Feb. 15
Due to the PATH Act change,
some people will get their refunds a little later. The new law requires the IRS
to hold the refund for any tax return claiming either the Earned Income Tax
Credit (EITC) or Additional Child Tax Credit (ACTC) until Feb. 15. By law, the
IRS must hold the entire refund, not just the portion related to the EITC or
ACTC.
Even with this change,
taxpayers should file their returns as they normally do. Whether or not
claiming the EITC or ACTC, the IRS cautions taxpayers not to count on getting a
refund by a certain date, especially when making major purchases or paying
other financial obligations. Though the IRS issues more than nine out 10
refunds in less than 21 days, some returns are held for further review.
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