Tax Season is Upon Us: IRS Due Dates, Tips, and More

This blog was last updated on January 13, 2025

With the tax reporting season now in full swing, we wanted to send out some last-minute updates and key reminders for tax year 2024. From critical filing dates and last-minute updates to insider tips to stay organized and avoid common mistakes, we’ve recapped everything you need to know to reduce the stress this tax season.

1. IRS due dates for furnishing and filing 2024 information returns.

As we dive into the 2025 tax season, it’s important to stay on top of key deadlines for furnishing and filing information returns. While the annual due dates remain largely unchanged this year, slight adjustments were made to account for weekends.

Below are the important due dates for furnishing information returns to the recipient:

If you need extra time to furnish statements, the IRS has introduced a new extension request process using Form 15397. Complete this form and fax it to the IRS Extension of Time Coordinator at 877-477-0572 (or 304-579-4105 for international filers).

Here are the due dates for filing information returns with the IRS, whether by paper or filing electronically:

2. IRS E-Filing Threshold and Method Changes

Don’t forget that the IRS has changed electronic filing threshold requirements beginning with 2023 information returns. Organizations must now electronically file all information returns such as Forms 1099 and W-2 once they meet the 10-return threshold. In other words, if an organization issues 25 Forms W-2 and 150 Forms 1099-NEC, they will now need to electronically file all of those forms. In the past, those forms could have all been sent to the IRS on paper.

Another critical change affects corrected returns. If an organization files an information return electronically (e.g., a 1099, W-2, or similar form), any corrected versions of those returns must also be filed electronically. This approach ensures consistency but also requires businesses to have robust systems in place for managing both original and corrected versions of information returns.

3. Key State Reporting Updates

State reporting of tax information is extremely dynamic and every year a slew of changes must be researched, interpreted, and applied to systems and processes.

Direct Filing vs. Combined Federal State Filing (CF/SF)

Some states require 1099 information to be filed directly regardless of whether they are listed as a participating state in the IRS’s Combined Federal State Filing program (CF/SF). Other states do not participate in the CF/SF at all. Some states require some forms to be filed that are not even included in the CF/SF.

With so many variations across states, having a reliable guide to navigate these complexities can save time and reduce the risk of errors. Stay informed and proactive to make state reporting a seamless part of your tax season preparations. Each year, Sovos updates this Direct State Reporting Guide to help our clients understand which states require direct filing of which returns, regardless of whether the state participates in the IRS’s CF/SF.

4. SECURE 2.0 Reporting Impacts to Form 1099-R (and W-2)

The SECURE 2.0 Act has introduced significant changes to tax reporting requirements for retirement plans, impacting both Form 1099-R and W-2 filings for 2025. These updates reflect Congress’s ongoing efforts to enhance retirement savings options and support individuals facing unique circumstances. The changes to Form 1099-R reporting include:

• The Required Minimum Distribution (RMD) age has increased to 73
• New distribution codes were introduced to address specific circumstances such as emergency personal expenses, domestic abuse victims and terminally ill individuals,
• New guidance shared on reporting designated Roth contributions for distributions made after December 29, 2022.

Be sure to familiarize yourself with the 1099-R instructions before issuing returns.

SECURE 2.0 also impacted W-2 reporting, reflecting Congress’s enhancements to encourage broader participation in employer retirement plans. New features include de minimis financial incentives, new IRA plan options, and optional treatment for some retirement contributions.

5. New boxes and codes for reporting on Form 1042-S

The IRS has released the 2024 version of Form 1042-S, introducing several key changes that impact how withholding agents report certain types of income and withholding. These updates include new boxes, codes, and instructions that filers need to familiarize themselves with before completing their returns.

• New checkbox 7d to indicate that the 1042-S is being filed to revise an amount subject to withholding in a withholding rate pool to report to a specific recipient.
• New chapter 3 status codes 40 for Qualified Derivatives Dealers (QDDs) and 41 for tax-exempt entities.
• New income codes 59 for consent fees, 60 for loan syndication fees, and 61 for settlement payments related to syndicated loan servicing payments,
• New country code US was added for use in Box 12f (withholding agent) or 13b (recipient).

Want to dive deeper into these changes? Join us on February 18 for our annual 1042-S Reporting session, where we’ll cover these updates in detail and provide guidance on how to adapt your processes for compliance. Reserve your spot.

6. Last-minute tax law changes impacting ACA reporting

The Affordable Care Act (ACA) reporting requirements for Forms 1095-B and 1095-C received a big Christmas gift from the IRS this year. President Biden signed two new bills—the Paperwork Burden Reduction Act and the Employer Reporting Improvement Act—into law that will impact the reporting requirements and penalty provisions for employers and health insurance providers that provide minimum essential health coverage under the Patient Protection and Affordable Care Act.

Key changes to ACA reporting include:

• Employers and health insurance providers are only required to furnish 1095-B and 1095-C upon request by a covered individual, provided that the employer or health insurance provider meets certain other requirements.
• Employers and health insurance providers may now report the date of birth for a covered individual when a tax identification number (TIN) is not available.
• Employers and health insurance providers may now furnish 1095-B and 1095-C electronically.
• Employers and health insurance providers now have 90 days to respond to Letter 226-J for a proposed assessment for failure to offer minimum essential coverage.
• A six-year statute of limitations now applies to the penalty for failure to provide minimum essential coverage.The 1095-B/1095-C distribution and reporting changes are effective for tax year 2024 statements furnished to recipients and filed with the IRS. These changes reduce the administrative burden for many organizations while providing more time and flexibility to comply with ACA reporting requirements. However, the adjustments to penalty provisions highlight the importance of maintaining accurate records and responding promptly to IRS communications.

From new filing thresholds and state reporting requirements to the impacts of SECURE 2.0 and ACA legislation, the 2025 tax season brings important changes that organizations must navigate to stay compliant. As always, Sovos is here to support you every step of the way. Sign up for our newsletter to get the latest insights on tax compliance and information reporting.