IRS reminder: Important backup withholding deadlines
FS-2023-03, January 2023
Some businesses and other payers withhold money from payments they made to certain people to satisfy backup withholding. These entities should remember their upcoming filing deadlines.
What is backup withholding?
Business and other payers generally don’t withhold taxes from payments reported on Forms 1099 and W-2G. There are, however, situations when a payer must withhold 24% of the payment to ensure the IRS receives the tax due on this income. This is known as backup withholding. Payers that withheld money for backup withholding must deposit the withholding with the IRS. More information about backup withholding is on these IRS.gov pages, Backup Withholding and Topic No. 307 Backup Withholding. Also review Publication 1281, Backup Withholding for Missing and Incorrect Name/TINs and Publication 15, Employer’s Tax Guide.
Backup withholding annual return filing due date for Tax Year 2022
Payers must report their liability for backup withholding and any other federal income tax withheld from nonpayroll payments on Form 945, Annual Return of Withheld Federal Income Tax. The last day for filing Form 945 for tax year 2022 is Jan. 31, 2023. However, if the payer made deposits on time and in full, the last day for filing is Feb. 10, 2023. Taxpayers can review the instructions for Form 945 for filing details and section 11 of Publication 15 for information on making federal tax deposits.
Information returns used to report backup withholding
The information returns listed below are used to report backup withholding to IRS and payees for tax year 2022:
- · Form 1099-B, Proceeds from Broker and Barter Exchange Transactions
- · Form 1099-DIV, Dividends and Distributions
- · Form 1099-G, Certain Government Payments
- · Form 1099-INT, Interest Income
- · Form 1099-K, Payment Card and Third-Party Network Transactions
- · Form 1099-MISC, Miscellaneous Information
- · Form 1099-NEC, Nonemployee Compensation
- · Form 1099-OID, Original Issue Discount
- · Form 1099-PATR, Taxable Distributions Received from Cooperatives
- · Form W-2G, Certain Gambling Winnings
Filing due dates for Information Returns
Except for Form 1099-NEC, the information returns listed above are generally due to the IRS on February 28, 2023, for paper filers, and March 31, 2023, for electronic filers. The filing due date for Form 1099-NEC is Jan. 31, 2023, for both paper and electronically filed returns.
Furnishing due date for Information Returns
Payers must furnish most information returns to payees by Jan. 31, 2023. Exceptions are in the Guide to Information Returns, beginning on page 26 of the General Instructions for Certain Information Returns (2022).
Information Return filing extensions
Payers can request a 30-day extension to file any of the information returns listed above by filing Form 8809, Application for Extension of Time to File Information Returns. Extensions are usually automatic except for Form 1099-NEC. Payers who need a 30-day extension to file Form 1099-NEC must meet one of the criteria listed on line seven of Form 8809. An additional 30-day extension may be available as described in instructions to the Form 8809.
Same employer identification number on all forms
Information returns and Form 945 must have the same employer identification number for filing. This is also a requirement for third parties such as accountants or agents filing on behalf of another payer. Filing returns with inconsistent EINs can result in processing delays and compliance notices, and possibly the assessment of penalties.
The IRS strongly encourages e-filing even though paper filing is available. E-filing is required if a taxpayer files 250 or more of any one type of information return. E-filing is the most secure, and accurate method to file returns, and it saves taxpayers' time and prevents delays in processing returns.
On Jan. 23, 2023, the IRS launched a free e-file service for any Form 1099. The Information Returns Intake System is a web-based platform that is accurate, convenient, easy to use, secure and it doesn’t require any additional software. Learn more about e-filing information returns with IRIS and its features.
For help with electronically filing information returns, review Publication 1220 and the Filing Information Returns Electronically page on irs.gov.
For more information on electronic filing of Form 945, see the E-file Employment Tax Forms page.