What is Form 1096 – An Employer’s Guide
Erez Greenberg| Oct 30, 2022
Tax form 1096 definition
Internal Revenue Service Form 1096 is used by companies in the US to summarize the information returns of seven different tax forms. A business must use form 1096 only if it submits one or more of the seven forms to the IRS in a paper format.
These seven tax forms include: 1097, 1098, 1099, 3921, 3922, 5498, and W-2G. Companies must submit a separate 1096 form for each type of tax return – e.g., one for all 1099 forms, and one for all W-2G forms – if they are filing by mail. If a company chooses to file its information returns electronically, it is not required to use form 1096.
Who needs to file form 1096?
Companies that file one or more of the following tax forms by mail must also submit IRS Form 1096:
- Form 1097 – Issuers of certain tax credit bonds must file this form for each tax
- Form 1098 – Reports mortgage interest of $600 or more received by a company during the previous tax year.
- Form 1099 – Businesses must submit Form 1099 for every contractor paid more than $600 for services during the tax year.
- Form 3921 – Filed by companies when a specific employee exercises an Incentive Stock Option (ISO).
- Form 3922 – Used to report certain information about stock transfers made by a company during the tax year.
- Form 5498 – Submitted to report contributions to employees’ individual retirement arrangements (IRAs).
- Form W-2G – Used to report gambling winnings and any federal income tax withheld on those winnings.
Filing your information returns electronically – via the IRS FIRE system – exempts you from using form 1096. The IRS FIRE system, which stands for “File Information Returns Electronically,” is an electronic network used to accept and process most types of filing forms. If a business submits 250 or more of any information return, it must do so electronically – and consequently, would not have to file form 1096.
Small companies use form 1096 primarily to summarize the information returns declared in their 1099-NECs, which report payments they’ve made to independent contractors. This includes all independent contractors, freelancers, or self-employed individuals who had their payments reported via form 1099-MISC before 2020.
Where can you access form 1096?
Since the IRS scans all the physical forms it receives, companies must submit a scannable, official version of the document, which must be ordered from the IRS ahead of time. A copy of form 1096 won’t be accepted.
You can order form 1096 from the IRS’s Order Forms & Publications page or over the phone at 1-800-TAX-FORM (1-800-829-3676). Another option would be to get the form at office supply stores or via your tax preparation software.
How to fill in IRS form 1096
- Step 1: Fill in the contact information at the top of the form: the company’s name (under “FILER’s name”) and address, the name of the person to contact, plus the person’s email address, phone number, and fax number.
- Step 2: Enter your employer identification number (EIN) in box 1, or your social security number (SSN) in box 2 if you don’t have an EIN.
- Step 3: In box 3, state the total number of forms you attach to this specific Form 1096. Bear in mind that they must all be of the same type.
- Step 4: In box 4, enter the total amount of federal income tax withheld on all the forms summarized in this 1096. If you didn’t withhold any federal income tax, enter a zero.
- Step 5: In box 5, enter the total amount of reported payments on all the forms submitted with this 1096. For example, if you’re submitting ten 1099-NEC forms and reporting $2,000 in each form, you would enter $20,000.
- Step 6: In box 6, mark the type of form you’re summarizing in this 1096.
How to file form 1096
Form 1096 must be sent by the employer, along with Copy As of the respective information returns forms, to its designated IRS office, which is determined by the company’s central location. To find where to send the form 1096 the IRS lists addresses according to state. You can also find the addresses on page 3 of the 1096 form.
When is the form 1096 due date
Form 1096 due date for most information returns is February 28, following the tax year. However, some information returns are due earlier (as early as January 31) and some later (as late as May 31). The IRS’s General Instructions for Certain Information Returns provides a complete list of form 1096 filing deadlines (starting on page 26) for all types of information returns.
What happens if you don’t file 1096 tax form
If a company doesn’t submit its information returns, including form 1096, by the due date and in the manner required, it will be charged with information return penalties by the IRS. The IRS will charge the company monthly interest until the penalty is paid in full.
Companies that don’t submit 1096 forms can be subject to the following penalties:
- Up to 30 days late – $50 per form
- 31 days late through August 1 – $110 per form
- After August 1 or not filed – $280 per form
- In cases of intentional failure to file – $570 per form
How to make corrections to tax form 1096?
Any mistake on the information returns attached to form 1096 requires notifying both the information return recipient and the IRS of the error – and resubmitting all the forms, including a new form 1096 for each type of return you are correcting.
If the mistake was made on form 1096 itself, you should submit a new form – with a letter explaining that the error occurred only on 1096 and not on the information returns – and include all the original documents, marked as a “Copy”.
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How many 1096 forms can I file?
Up to 250 forms. If a business submits 250 or more information returns, it must do it electronically.
What are the deadlines for filing form 1096?
The due date for Form 1096 depends on the filing deadline of the information returns it summarizes. The deadline for most information returns is February 28, following the tax year. You can find all the due dates for information returns here.
Do I need to file Form 1096 if I filed my tax forms electronically?
No. A business needs to file Form 1096 only if it submits its information returns to the IRS in a paper format.
What is the difference between form 1096 and 1099?
Form 1099 documents payments to contractors in amounts over $600. Form 1096 is a summary page for many forms, including 1099.