Late Forms W-2 and 1099-NEC
In summary
- Forms W-2, “Wage and Tax Statement,” and 1099-NEC, “Nonemployee Compensation,” for the 2024 calendar year were due Jan. 31.
- Taxpayers that discover that they didn’t timely file the forms might be able to reduce the penalty for late filing by filing as soon as possible.
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2024 Forms W-2 and 1099-NEC were required to be filed by Jan. 31. Taxpayers that didn’t file these returns on time can reduce their late filing penalty exposure by filing them as soon as the omission is discovered.
Background
Beginning in 2016, the due date for filing information returns reporting employee and nonemployee compensation was accelerated from Feb. 28 (March 31 if electronically filed) to Jan. 31. The Jan. 31 due date applies regardless of whether the return is filed on paper or electronically.
The accelerated due date caused significant confusion, and many taxpayers were penalized for late filing. Taxpayers reporting non-employee compensation on Form 1099-MISC faced particular confusion. The Form 1099-MISC reports different types of income with later filing due dates. However, if the Form 1099-MISC also reported nonemployee compensation, it was required to be filed by Jan. 31. Many taxpayers were not aware of this rule and filed late. To help alleviate confusion about the accelerated filing due date for reporting nonemployee compensation, the IRS created Form 1099-NEC – a single-purpose form to report nonemployee compensation.
Penalties encourage filing as soon as the error is discovered
Penalties for failure to file correct and timely information returns (like Forms W-2 and 1099-NEC) are graduated to encourage taxpayers to file information returns even if they are filed late. For instance, for information returns required to be filed in 2025, the penalty is $60 per form for filing up to 30 days late, $130 per form for filing 31 days late through Aug. 1, and $330 per form for filing after Aug. 1 or not filing at all.
Crowe observation
The penalty for failure to file information returns can be waived for reasonable cause. However, the IRS will grant reasonable cause only if correct returns are filed, even if they are filed late.
Looking ahead
There are many reasons why information returns might not be filed on time, but filing as soon as the omission is discovered could mean that lower penalty amounts apply. Therefore, while the Jan. 31 date for filing 2024 Forms W-2 and 1099-NEC has passed, taxpayers that discover unfiled Forms W-2 and 1099-NEC should consider filing missed returns as soon as they are able. Filing late almost certainly will trigger a penalty. However, when the penalty notice is received, eligible filers can request reasonable cause relief.
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