Form 1099 Late Filing Penalties for 2023
Form 1099 - Penalty Rates
Updated on October 17, 2023 - 10:30 AM by Admin, TaxBandits
A penalty will be charged if you fail to issue Form 1099 to the payee. The amount of the penalty is based on when you file the correct information return or furnish the correct payee statement. If you don’t file a correct Form 1099 with the IRS and don’t provide a correct Form 1099 statement to the payee, you may be subject to two separate penalties.
1. What Happens If you Don’t File 1099 Forms?
If you fail to file 1099 Forms by the deadline and cannot show reasonable cause, you may be subject to penalties. You may be penalized if you:
- Fail to file by the deadline
- Fail to include all the required information to complete your 1099 Forms
- File with incorrect information
- File with paper forms when you’re required to e-file
- Report an incorrect TIN
- Forget to include a TIN, or
- File paper 1099 Forms that are not machine-readable
2. Penalties for Filing 1099 Forms Late
If you fail to file Form 1099-NEC before the deadline (January 31st), it can lead to IRS penalties. The penalties might vary between $60 to $630 per form, based on the business size and when you file the return.
3. What are the 1099 Penalty Rates for Small Businesses?
Small Businesses With Gross Receipts Less Than or Equal to $5 Million
(Based on average annual gross receipts for the most recent 3 taxable years)
| Time returns filed/furnished | Penalties |
|---|---|
| Not more than 30 days late | $60 per return or statement - $220,500 maximum |
| 31 days late – August 1 | $120 per return or statement - $630,500 maximum |
| After August 1 or Not At All | $310 per return or statement - $1,261,000 maximum |
| Intentional Disregard | $630 per return or statement - No limitation |
4. What are the 1099 Penalty Rates for Large Businesses
Large Businesses With More Than $5 Million in Gross Receipts and Government Entities
(Based on average annual gross receipts for the most recent 3 taxable years)
| Time returns filed/furnished | Penalties |
|---|---|
| Not more than 30 days late | $60 per return or statement - $630,500 maximum |
| 31 days late – August 1 | $120 per return or statement - $1,891,500 maximum |
| After August 1 or Not At All | $310 per return or statement - $3,783,000 maximum |
| Intentional Disregard | $630 per return or statement - No limitation |
5. When is the deadline to file Form 1099?
The deadline to file Form 1099 depends on the specific type of 1099 form and the information being reported. Generally, most Form 1099s should be provided to the recipient by January 31, and a copy should be filed with the IRS by February 28 if filed on paper or March 31 if filed electronically.
There are exceptions to this general deadline.
- Form 1099-NEC should be distributed to both recipients and the IRS by January 31, regardless of the filing method.
- If Box 8 or 10 is reported on Form 1099-MISC, the recipient copy should be filed by February 15.
- The recipient copies of the Form 1099-S and 1099-B should be distributed before February 15.
Note: The deadline for sending COPY B to the recipient is February 15, 2023, if you report payments only in box 8 or 10.