IRS Temporary Regulations Eliminate the Automatic 30-Day Filing Extension for Forms W-2

Editor: Michael Dell, CPA

Under temporary regulations, and effective for the 2017 filing season, employers will be allowed only a single, nonautomatic 30-day extension of the filing due date for the Form W-2 series (except for Form W-2G, Certain Gambling Winnings) (T.D. 9730; REG-132075-14).

The IRS intends to remove the automatic 30-day extension to file other information returns (e.g., Form 1099) but anticipates these changes will not be effective any earlier than the 2018 filing season.

The IRS explains that eliminating the 30-day automatic extension is necessary in an effort to make Forms W-2 available earlier in the filing season for use in its identity theft and refund fraud detection efforts.

The temporary and proposed regulations also update and clarify that the information returns for which payers may request a filing extension under Temp. Regs. Sec. 1.6081-8T include the Form 1097 series; Form 3921, Exercise of an Incentive Stock Option Under Section 422(b); Form 3922, Transfer of Stock Acquired Through an Employee Stock Purchase Plan Under Section 423(c); and returns required under the Patient Protection and Affordable Care Act, P.L. 111-148, except Form 1095-A, Health Insurance Marketplace Statement (i.e., Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information; Form 1095-B, Health Coverage; and Form 1095-C, Employer-Provided Health Insurance Offer and Coverage).

Current Procedures for Requesting a Filing Extension

Under the current procedures, if an employer is unable to meet the Form W-2 filing deadline, an automatic 30-day extension can be obtained by filing Form 8809, Application for Extension of Time to File Information Returns, with the IRS. “Automatic” means that the Form 8809 need not be approved by the IRS, nor is an explanation for the extension request required.

One additional 30-day filing extension may be requested by submitting a second Form 8809; however, the IRS will approve this request only when extenuating circumstances prevent filing by the date of the first extension. Treasury and the IRS requested comments on the appropriate timing of the removal of the automatic extension to file information returns covered by Temp. Regs. Sec. 1.6081-8T, such as Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, including whether special transitional considerations should be given for any category or categories of forms or filers relative to other forms or filers.

Implications

Increasingly, federal and state taxing authorities have looked to an earlier Form W-2 due date to reduce tax refund fraud linked to identity theft. In 2015 alone, Alabama, Connecticut, Indiana, Utah, and Virginia accelerated their Form W-2 filing due dates to Jan. 31. President Barack Obama proposed in his fiscal year 2016 budget that the filing due date for both paper and electronic Forms W-2 be moved up to Jan. 31. However, for now, the dates remain the last day of February for paper Forms W-2 and March 31 for electronically filed ones.

Editor’s note: After the publication of this item, the due dates for Forms W-2 and W-3 and for returns or statements that report nonemployee compensation (such as Form 1099-MISC, Miscellaneous Income) were changed to Jan. 31 of the year following the calendar year to which the return relates, effective for returns and statements relating to calendar years after the date of enactment (Consolidated Appropriations Act, 2016, P.L. 114-113).
 

A version of this item appeared in an EY Payroll NewsFlash.

EditorNotes

Michael Dell is a partner at Ernst & Young LLP in Washington.

For additional information about these items, contact Mr. Dell at 202-327-8788202-327-8788 or michael.dell@ey.com.

Unless otherwise noted, contributors are members of or associated with Ernst & Young LLP.

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