1099 Updates: Feb. 1 Through Feb. 16
Regulatory and legislative updates to 1099 form requirements between Dec. 28, 2016 and Jan. 11, 2017. Â
Individual states and the IRS introduce new 1099 form requirements and changes to existing legislation on a frequent basis. Sovos documents each of these updates in its Taxport Compass portal to arm clients with the most current and accurate information and ensure that they are on the right track in their compliance efforts.
Here are several recently updated requirements courtesy of Taxport Compass:
IRS Publishes Revenue Procedure 2017-15, Containing Revised QI Agreement and Changes to Form 1042-S
The IRS recently finalized the Qualified Intermediary (QI) Agreement, which financial institutions must abide by to simplify their income reporting and withholding obligations under FATCA. The QI Agreement delineates certain procedures that a QI must undertake to satisfy compliance review obligations.
The final 2017 QI Agreement will apply to all QI Agreements that are in effect as of or after January 1, 2017. All QIs seeking to renew their QI Agreements must do so through the online portal before March 31, 2017.
As a result of the changes in the QI Agreement, the IRS has directed 1042-S filers to refrain from using the following Chapter 3 Status Codes for Tax Year 2017:
- Code 33: Joint account withholding rate pool
- Code 36: Qualifying dividend equivalent offsetting payments to U.S. persons
- Code 37: Nonqualifying dividend equivalent payments to U.S. persons â€“ Undisclosed
- Code 38: Other qualifying dividend equivalent offsetting payments (ECI)
Oregon Updates Administrative Rules for Information Returns and Penalties
The Oregon Department of Revenue amended its Administrative Rules, Section 150-314-0140 relative to the submission of information returns. Information returns must now be electronically submitted by all filers regardless of the number of returns being submitted. This electronic filing mandate applies to the following forms:
In addition, the Department has done away with a penalty provision that presumes a payer â€śknowingly failed to fileâ€ť after neglecting to file an information return for two consecutive years.
South Carolina Issues Information Letter: New Due Dates for Certain Withholding Filings and Remittances
The South Carolina Department of Revenue released an information letter regarding the new withholding due dates that went into effect this year.
Forms W-2 and 1099 are due on January 31 for Tax Year 2016 and forward. A withholding agent may request a 30-day extension for filing these forms. Because of this change, the Department has also moved the due date for the Fourth Quarter Withholding Return and Annual Reconciliation to January 31 for Tax Year 2016 and forward.
Connecticut Releases 2017 Employerâ€™s Tax Guide and the Connecticut Quarterly Reconciliation of Withholding
Connecticut has released its 2017 Circular CT, Employerâ€™s Tax Guide. There are some changes from the previous revision:
- Most new employers will now be classified as monthly remitters
- Circular CT now includes a definition for the term weekly remitter
- Removed instructions for Direct Deposit Option on Form CT-941
Connecticut has released its 2017 Form CT-941, Connecticut Quarterly Reconciliation of Withholding. Â There are no changes from the previous revision.
The IRS and individual states are constantly updating forms and regulations. Keep up with the ever-changing landscape by making use of Sovosâ€™ Taxport Compass portal.