Does your company submit ten or more information returns to the IRS? If so, then you need to submit them electronically right now. On January 1, 2024, tax year information returns for 2023 were subject to a significant regulatory modification. Information returns must now be filed electronically with a lower threshold of 10, down from 250. Only companies filing 250 or more information returns had to do so electronically before the new requirement. Notably, every kind of information return was subject to a different 250-return threshold. Businesses are now required to electronically file returns if the total of all information return types filed exceeds ten.

The IRS and the U.S. Department of the Treasury released the final regulations for the new rule on February 21, 2023.

Electronically filing information returns affected

According to IRS statistics, it receives close to 4 billion information returns annually. Furthermore, the agency projects that it will receive more than 5 billion information returns annually by 2028.

“Required to file certain returns, including partnership returns, corporate income tax returns, unrelated business income tax returns, withholding tax returns, certain information returns, registration statements, disclosure statements, notifications, actuarial reports, and certain excise tax returns,” according to the final regulations, will be subject to the new e-filing requirements.

A few of the forms included are as follows:

• Form 1099 issued to report independent contractor income, interest and dividend income, retirement plan distributions, prizes, and other payments
• Form W-2 issued to report employee wages
• Form 1098 issued to report mortgage interest paid for the year
• Form 8300 issued to report cash payments over $10,000 received in a trade or business

Please note that you must submit W-2 wage statements, 1099-NEC forms for independent contractors, and other documents to the government by January 31. The IRS has an online guide about information returns and their due dates available.

Penalties and exclusions

Companies that must e-submit information returns but choose to file them on paper risk penalties from the IRS. By submitting Form 8508 to the IRS, filers who believe filing electronically will cause undue hardship can ask to have the need to file electronically waived. For further advice on your information return filing responsibilities, contact our RRBB advisors.

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