New Electronic Filing Requirements for Forms W-2

This past February 23, the IRS published Treasury Decision 9972 requiring filers of 10 or more tax or information returns in aggregate within a calendar year to file electronically.

Previously, electronic filing was only required if the filing was for more than 250 returns of the same type for a calendar year. The new regulations are effective for filings on or after January 1, 2024. 

Authorized by Congress’ enactment of Section 2301 of the Taxpayer First Act, revised requirements push for a significant reduction in the number of paper returns covering a broad variety of submissions, including:

• Partnership returns
• Corporate income tax returns
• Unrelated business income tax returns
• Withholding tax returns for U.S. Source Income of Foreign Persons
• Information returns
• Registration statements
• Disclosure statements
•  Actuarial reports

As part of the Treasury decision, organizations will no longer be able to determine e-filing requirements by separately considering the number of forms W-2 and 1099 individually. For example, a company with 150 Forms W-2 and 100 Forms 1099 was not required to file electronically in previous years since regulations applied to each type of return independently. Under the new regulations, filers will be required to aggregate all return types (e.g., W-2s and 1099s) in calculating whether the company is at or above the new 10-return threshold.  Note, however, that Forms 940 and 941 do not have to abide by the new e-filing obligations. 

These new regulations may raise some concerns for organizations filing returns that were under the previous threshold, including a potential learning curve at small companies that may not have the software compatibility to follow the updated e-filing requirements. The new mandate also assumes that these organizations have adequately trained employees and protected networks. Additionally, the new regulations may create challenges and potential costs for companies unfamiliar with the current e-filing technology, specifically as it relates to these new tax requirements. 

Given that the new mandatory electronic filing requirements are complicated, please feel free to reach out to us at Schneider Downs where we can assist you in both understanding and compliance with the new rules, as well as helping to facilitate electronic filings. 

About Schneider Downs Tax Services

Schneider Downs’ tax advisors have experience and expertise in a wide range of industries, including Automotive, Construction, Real Estate, Manufacturing, Energy & Resources, Higher Education, Not-for-profits, Transportation and others. Our industry knowledge and focus ensure the delivery of technical tax strategies that can be implemented as practical business initiatives.  

To learn more, visit our dedicated Tax Services page.