Tax Tip 2023-08: Reminder: backup withholding payment deadlines are coming soon

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Issue Number: Tax Tip 2023-08

 Reminder: backup withholding payment deadlines are coming soon

Businesses or other payers required to take backup withholding funds from payments should make sure they have a few upcoming filing deadlines on their calendar.

Backup withholding can apply to most kinds of payments reported on Forms 1099 and W-2G. There are, however, situations when a payer must withhold 24% of the payment to ensure the IRS receives the tax due on this income. This is known as backup withholding. If a payer does backup withhold, they must deposit the withholding with the IRS. Taxpayers should review Publication 15, Employer’s Tax Guide, for more information on making deposits.

Due date for Form 945, Annual Return of Withheld Federal Income Tax
Businesses and other payers must report their liability for backup withholding and any other federal income tax withheld from nonpayroll payments on Form 945, Annual Return of Withheld Federal Income Tax. The last day for filing Form 945 for tax year 2022 is Tuesday, Jan. 31, 2023. However, if the payer made deposits on time and in full, the last day for filing is Friday, Feb. 10, 2023.

Due date for Form 1099-NEC, Nonemployee Compensation
Form 1099-NEC must be filed with the IRS by Tuesday, Jan. 31, 2023. This is a different deadline from other forms in the 1099 series. This due date applies to both paper and electronically filed returns.

Due dates for certain information returns
The information returns listed below are used to report backup withholding for tax year 2022. They’re due to the IRS on Tuesday, Feb. 28, 2023, for paper filers and Friday, March 31, 2023, for electronic filers. These information returns are:

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

Taxpayers should review Publication 1220, Specifications for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G for help electronically filing information returns. Payers must also provide corresponding information returns to the payees by the due dates. Payers should review the “Guide to Information Returns” in the General Instructions for Certain Information Returns.

Payers must use the same employer identification number on all forms
Information returns and Form 945 must be filed with the same EIN. Filing returns with inconsistent EINs can cause processing delays and the assessment of penalties.

Information return filing extensions
A payer can request a 30-day extension to file any of the information returns listed above by filing Form 8809, Application for Extension of Time to File Information Returns. An extension is usually granted automatically. However, the IRS does not automatically grant an extension for Form 1099-NEC. Payers who need a 30-day extension to file Form 1099-NEC must meet one of the criteria listed on line 7 of Form 8809. An additional 30-day extension may be available as described in instructions to Form 8809.

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