IRS reminds businesses about backup withholding deadlines and forms

This week, the Internal Revenue Service reminded affected businesses and taxpayers that the deadlines for several backup withholding forms were looming. In the tax tip, the agency broadly explained what backup withholding is before identifying deadlines for specific forms.

The IRS explained that backup withholding is a “[situation] when the payer is required to withhold a certain percentage of tax to make sure the IRS receives the tax due on this income.” The explanation included a link to the backup withholding page on IRS.gov.

What are the backup withholding deadlines?

Some of the backup withholding forms could be due as early as this Friday, though that deadline only applies to Forms 945 and 1099-MISC that meet certain criteria.

According to the IRS, Form 945, Annual Return of Withheld Federal Income Tax, is due on January 31, 2020, unless “the payer made deposits on time and in full.” In which case, “the deadline is Monday, February 10, 2020.”

As for Form 1099-MISC, it’s due this Friday if the taxpayer is “[reporting nonemployee compensation] in box 7.” The IRS stressed that this deadline applies regardless of whether “the payer is submitting the form on paper or electronically.” (Taxpayers reporting any other types of payments on the 1099-MISC have until March 31, 2020.)

Information returns dominated the rest of the release, and the deadlines for these forms come a little later in filing season:

• Friday, February 28, 2020 for paper
• Tuesday, March 31, 2020 for e-file

Clients who are worried about having everything ready for the IRS by either of those dates can always try to get an extension.

The IRS notes that taxpayers “can request a 30-day to file any of the information returns … by filing Form 8809, Application for Extension of Time to File Information Returns,” which “is usually granted automatically.” That being said, the agency warns that extensions for Form 1099-MISC are only granted if the taxpayer “[meets] one of the criteria listed on line 7 of Form 8809.”

Here’s the full list of backup withholding-related information returns from the press release:

• Form 1099-B, Proceeds from Broker and Barter Exchange Transactions (PDF)
• Form 1099-DIV, Dividends and Distributions (PDF)
• Form 1099-G, Certain Government Payment (PDF)
• Form 1099-INT, Interest Income (PDF)
• Form 1099-K, Payment Card and Third-Party Network Transactions (PDF)
• Form 1099-MISC, Miscellaneous Income (PDF)
• Form 1099-OID, Original Issue Discount (PDF)
• Form 1099-PATR, Taxable Distributions Received from Cooperatives (PDF)
• Form W-2G, Certain Gambling Winnings (PDF)

Source: Tax Tip 2020-08