Businesses, be aware there is an earlier W-2 tax deadline this year. Instead of the end of February, the IRS has established January 31, 2017 as the new deadline to submit employees’ annual wages and taxes withheld.
W-2 Tax Deadline for Business Changes in 2017
The Protecting Americans from Tax Hikes (PATH) Act, which was enacted in December 2015, included this new W-2 requirement for all employers. The new policy, which aims to help the IRS detect and prevent fraud, applies to both the paper and electronic copies that are to be filed with the Social Security Administration.
Businesses who hire independent contractors must also submit 1099-MISC forms by this same date.
Employers will incur penalties if they miss this January 31 tax deadline.
In the past, employers could submit these two types of documents until the end of February, if they file on paper, or at the end of March, if they file electronically.
New IRS Policy Aims for more Accuracy
The new W-2 and 1099 tax deadline is intended to allow the IRS more time to verify the legitimacy and/or spot errors on returns filed by taxpayers.
The IRS will hopefully be able to more quickly and properly release tax refunds than in previous years.
When tax planning also be aware the PATH Act has changed the rules on extensions. Only one 30-day extension is allowed, and it is not automatic. Employers must file a Form 8809 Application for Extension of Time to File Information Returns to qualify. This deadline is also January 31.
Some Refunds to be Delayed until at least February 15
The new policy may delay when some employees receive their refund checks. The government is now required to hold the entire refund of any return that claims the Earned Income Tax Credit or the Additional Child Tax Credit until February 15.
However, there is no change in how or when taxpayers are expected to file with the IRS.