IRS Issues Final Regulations on Electronic Filing Requirements for Information Returns

On February 21, 2023, the IRS published final regulations ( T.D.9972), significantly expanding the electronic filing mandate for various returns, including Forms 1094 and 1095-C, 1099-series and Forms W-2 beginning in 2024. The final regulations reflect changes made by the Taxpayer First Act of 2019 to increase electronic filing requirements. The reason for the delayed application date to 2024 is to give sufficient time for impacted filers and vendors to prepare for an increase in electronic filing.

Form 1094 Series; Forms 1095-B and 1095-C; Form 1099 Series; and Form 5498 Series
Under current regulations, the 250-return threshold applies separately to each type of information return covered under the regulations. The final regulations reduce the 250-return threshold to 10 or more returns in a calendar year. Furthermore, filers must aggregate almost all return types covered by the regulation to determine whether a filer meets the 10-return threshold rather than applying the 10-return threshold separately to each type of form. These new changes will take effect for returns filed on or after January 1, 2024. The proposed regulations issued in 2021 reduced the threshold to 100 returns for calendar year 2022 before the threshold decreases significantly to 10; however, the final regulations didn’t adopt this transition period.

For specific rules for other forms, please refer to the final regulations.

Additionally, the final regulations instruct that filing any corrected information returns must be filed in the same manner as the original formats (electronic or paper).

The final regulations generally provide hardship waivers for filers who would experience hardship complying with the electronic filing requirements, such as religious reasons.

These regulations considerably expand the electronic filing requirements to smaller employers and other filers. Employers who are filing returns in paper form should determine whether they will be subject to the electronic filing requirement in 2024. Further, affected employers should consult with their legal or tax advisor and consider engaging with an appropriate tax filing (or ACA reporting) vendor or implementing appropriate software to meet the new electronic filing requirements.

Final Regulations »
Press Release »