Overview of IRS E-Filing Requirements
IRS e-filing requirements will now require more forms to be submitted to the IRS electronically, including lower thresholds for Form 1099s and W-2s
Businesses should be aware that the Department of the Treasury and the Internal Revenue Service (IRS) expanded the tax return and business document e-file requirements for the 2024 filing season. While over 82 percent of businesses are already e-filing, the IRS still receives nearly 40 million paper information returns per year. With the additional reduction of paper information returns, the IRS aims to re-allocate resources and improve services for taxpayers and improve overall efficiencies without undue hardship on taxpayers. Final regulations amending the rules for filing returns and other documents electronically (e-file) were announced in February 2023.
The following tax returns and business documents fall under the 2024 e-file requirements. Please note that information returns include 1099s and W-2s.
- Partnership returns
- Corporate income tax returns
- Unrelated business income tax returns
- Withholding tax returns
- Certain information returns
- Registration statements
- Disclosure statements
- Actuarial reports
- Certain excise tax returns
The final regulations:
- Reduce the 250-return threshold enacted in prior regulations to generally require electronic filing by filers of 10 or more returns in a calendar year. The final regulations also create several new regulations to require e-filing of certain returns and other documents not previously required to be e-filed;
- Require filers to aggregate almost all information return types covered by the regulation to determine whether a filer meets the 10-return threshold and is required to e-file their information returns. Earlier regulations applied the 250-return threshold separately to each type of information return covered by the regulations;
- Eliminate the e-filing exception for income tax returns of corporations that report total assets under $10 million at the end of their taxable year, and
- Require partnerships with more than 100 partners to e-file information returns, and they require partnerships required to file at least 10 returns of any type during the calendar year to e-file their partnership return.
IRS E-Filing Resources
Need help filing the IRS Form 1099 information returns electronically? Access the new IRS Information Returns Intake System (IRIS) online portal. This free electronic filing service is secure, accurate and requires no special software. The IRIS is available to any size business but may be most helpful to a small business that currently sends their 1099 forms on paper to the IRS.
E-File Hardship Waivers
The final regulations generally provide hardship waivers for filers that would experience hardship in complying with the e-filing requirements and administrative exemptions from the e-filing requirements to promote effective and efficient tax administration.
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The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.