Backup Withholding Payment Deadline
Backup withholding is a process by which the payer is required to withhold a certain percentage of the payment to ensure that the Internal Revenue Service (IRS) receives the tax due on the income. This can apply to most payments reported on Forms 1099 and W-2G.
Due Date for Form 945, Annual Return of Withheld Federal Income Tax
Businesses and other payers must file their liability for backup withholding and any other federal income tax withheld from non-payroll payments on Form 945, Annual Return of Withheld Federal Income Tax. The due date for filing Form 945 for tax year 2022 is January 31st, 2023. However, if the payer made deposits on time and in full, the deadline for filing is February 10th, 2023.
Due Date for Form 1099-NEC, Nonemployee Compensation
Form 1099-NEC must be filed with the IRS by January 31st, 2023. This deadline is different from other forms in the 1099 series and applies to both paper and electronically filed returns.
Due Dates for Certain Information Returns
The following information returns are used to report backup withholding for tax year 2022 and are due to the IRS on February 28th, 2023, for paper filers and March 31st, 2023, for electronic filers:
- Form 1099-B, Proceeds from Broker and Barter Exchange Transactions
- Form 1099-DIV, Dividends and Distributions
- Form 1099-G, Certain Government Payments
- 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
Payers should provide corresponding information returns to the payees by the due dates. Payers can also refer to Publication 1220, Specifications for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G for help with electronic filing of information returns. Additionally, the “Guide to Information Returns” in the General Instructions for Certain Information Returns can be consulted for more information.
Use of Consistent Employer Identification Number
Information returns and Form 945 must be filed with the same Employer Identification Number (EIN). Filing returns with inconsistent EINs can result in processing delays and the assessment of penalties.
Information Return Filing Extensions
Payers 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 also be available as described in the instructions to Form 8809.
In conclusion, it’s important for businesses and other payers to be aware of the upcoming deadlines for backup withholding payments. Proper planning and preparation can help avoid any penalties and ensure compliance with the IRS regulations. As a tax professional, I strongly recommend that my clients review all the relevant information, including Publication 15, Employer’s Tax Guide, and Publication 1220,