Using Form 1099 Extensions

Tax Professionals Resource
September 14, 2012 — 1,430 views  
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Internal Revenue Service (IRS) Form 1099 is used by all persons and businesses that make certain nonemployee payments during the tax year. Anyone who is required to use Form 1099 must submit the completed form to both the IRS and the recipient of the payment by the proper deadlines. Extensions are available and can be requested, but those filing late are subject to penalties.

Who Must File Form 1099

Form 1099 must be filed by any taxpayer or business that makes qualifying payments to nonexempt recipients. Qualifying payments include rental fees, interest, royalties and total services of $600 or more to a single entity during the tax year. Following are examples of payments that must be reported on Form 1099:

• Management and consultation fees
• Legal fees and other professional fees
• Interest payments
• Corporate distributions
• Debt cancellations

Form 1099 Filing Deadline

The deadline to file Form 1099 with the IRS depends on whether it is filed as a paper submission or an electronic submission. The deadline for filing paper forms is February 28 of the year following the year the payments were made. The deadline for electronic submissions is one month later on March 31. 

Extensions for filing with the IRS may be requested by filing Form 8809 before the initial deadline. Filing this form automatically extends the deadline by 30 days. If more time is required, a second Form 8809 may be filed for an additional 30-day extension, but it must be accompanied by a letter of hardship.

Form 1099 Payee Deadline

The deadline for sending copies of Form 1099 to payees is January 31 of the year following the payment year. Extensions may be granted for a maximum of 30 days in cases of extreme hardship or when a catastrophic event has occurred. No form is available for this extension. Requests must be made in writing, and if requesting extensions for more than 10 payees, the request must be made electronically. 

All letters of request must contain the following information:
• Payer name and address
• Taxpayer identification number (TIN)
• Type of statement for which the request is being made
• Reason for the delay
• Signature of the payer or an authorized representative

Penalties for Missed Deadlines

The amount of the penalty for filing Form 1099 with the IRS after the deadline depends on the length of time the form is late:
• 30 days or less – $30 per form
• Over 30 days but before August 1 – $60 per form
• After August 1 – $100 per form

Failure to provide copies of Form 1099 to payees before the deadline will result in a penalty of $250 per form.

Tax Professionals Resource