October 27, 2023

The Internal Revenue Service (IRS) and Department of the Treasury have issued regulations that decrease the threshold for electronic filing of certain tax returns. As of January 1, 2024, businesses that file 10 or more informational returns in a calendar year must do so electronically. This is a significant shift from the previous threshold of 250 returns of any one type. This change impacts various informational returns including W2s, 1099s, 1094-C/1095-Cs, and more.

The final regulations also introduce several new rules for e-filing, including:

• The elimination of the e-filing exception for corporations reporting total assets under $10 million at the end of their taxable year,
• The requirement for partnerships with over 100 partners to e-file information returns, and
• The requirement for partnerships filing at least 10 returns of any type within the calendar year to e-file their partnership return.

The IRS and the Department of the Treasury have provided hardship waivers for businesses that would experience significant difficulties in complying with the new e-filing requirements. They have also established administrative exemptions, including individuals whose religious beliefs conflict with using the necessary technology to file electronically.

What’s Next

Businesses using third-party service providers to file/prepare information returns should confirm with their providers that they are adhering to the new e-file requirements. Business owners who file these forms personally can do so electronically through the following:

• W-2s: Social Security Administration (SSA)
• 1099s: Information Returns Intake System (IRIS); or Filing Information Returns Electronically (FIRE) (requires business have a separate software to create electronic files)

Businesses without an account with these agencies should follow the registration instructions available on each respective website.

Contact us or your third-party service representative if you have any questions about complying with the new electronic filing requirements.