The IRS is reminding employers and small businesses that Forms W-2 and Forms 1099-MISC reporting compensation to non-employees (e.g., independent contractors) must now be filed with the Social Security Administration by January 31. Employers previously had until the end of February, if filing on paper, or the end of March, if filing electronically, to file these forms. This new filing deadline was included as part of the Protecting Americans from Tax Hikes (PATH) Act, enacted in December 2015, and was instituted to help the IRS more easily identify fraudulent and erroneous income tax returns filed by individual taxpayers in the spring. Employers can request a single, 30-day extension to file the forms if the January 31 deadline presents a hardship, but the extension will not be automatic.
In addition, the IRS is reminding individual taxpayers that the PATH Act also requires the IRS to now hold refunds for any tax returns claiming either the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) until February 15, with regard to all returns filed prior to that date. The IRS must hold the entire refund, not just the portion related to the EITC or ACTC.