Out with the old and in the with the new: tax season is finally here, and with it come changes to the filing deadlines for employers and delayed refunds for many.
What About the Deadlines Are Changing Exactly?
Two things are changing: first, the filing deadline for W-2s and 1099s for employers has been moved up from February 28th to Tuesday, January 31st, 2017. This means that an employer must file W-2 and certain 1099 forms reporting non-employee compensations (such as an independent contractor) no later than January 31st.
You can file an extension for filing W-2s as an employer, however, this extension is not automatic and the form must be completed and filed no later than January 31st. This extension only extends the filing deadline for 30 days, so the extension form and the W-2s should be completed as soon as possible.
Additionally, some individual taxpayers will be receiving their refunds later than usual, as the Federal Government will be holding on to them until February 15th, 2017. Taxpayers affected by this delay will be individuals who claim the Earn Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) on their return.
Why Are the Filing Deadlines and Refund Dates Being Changed?
These changes are due to The Protecting Americans from Tax Hikes (PATH) Act of 2015, which was voted on by Congress and signed into law by President Obama. Essentially, these changes have been put in place in an effort to reduce tax fraud.
Due to how the system used to work, where an employer would submit the paper W-2 to the employee and 1-2 months would pass before the paperwork was filed with the SSA, this caused problems both at the federal and state levels as it forced them to process refunds as quickly as possible. As a result of this quick turnaround time and there being no way to ensure that the refund was actually sent to the taxpayer instead of a fraudulent filer, an estimated $5 billion in fraudulent refunds were sent out in 2013.
Unfortunately, this tax fraud also extends to the EITC and the ACTC, as identity thieves and return-filers lying on their returns in regards to these credits accounted for more than $3 billion in fraudulent refunds in 2014. So, while these tightened deadlines and delays in returns can cause ripples in the running of your family’s financial plans or your business’s planning schedule, they are an effort to ensure that the Federal Government isn’t giving out money to those who don’t deserve it.
When Are These Deadlines and Delays Again?
If you are an employer or business owner, the filing deadline for W-2s and certain 1099s is January 31st, 2017.
If you would like to file an extension on filing your W-2s, the deadline for filing the extension is also January 31st, 2017 and the extension would end on March 2nd, 2017.
If you are an individual taxpayer and plan on claiming the Earn Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) on your return, your refund will be delayed until at least February 15th, 2017.
Contact Executive Accounting Services for Help Today
Are you an employer who needs help with filing your W-2s or filing an extension? Are you an individual taxpayer who wants help with your return? Our professional accounting staff are heavily experienced in helping you with your W-2s and return. Contact Executive Accounting Services today by filling out our form or calling us at 919-859-8600.