December is fast approaching, and IRS has some important year-end updates your finance team needs.
Both Accounts Payable and Payroll will need to be aware of these. And the sooner the better!
1. Updated process to set up e-file for 1099s
If this is the first year your company is filing its 1099s electronically, be aware: The process to get up and running has changed.
The Transmitter Control Code (TCC) application process has been moved from the Filing Information Returns Electronically (FIRE) System to IRS’s site. So say goodbye to the fill-in version of Form 4419 that’s been part of the FIRE System.
Note: Existing FIRE users who already have a TCC will move to the new application platform, allowing them to update applications online.
2. Truncated SSNs allowed by IRS
If you prefer for security’s sake to truncate Social Security numbers (SSNs) on key year end forms, go ahead. It’s OK by the feds.
This latest of the year-end updates marks the second tax year employers can choose to truncate SSNs on Forms W-2 and Forms W-2C.
Just make sure Payroll knows to:
- Use asterisks or Xs to block the first five digits of SSNs, and
- Mask SSNs only on employees’ copies of forms.
And circle Jan. 31, 2022 in red on the collective calendar. That’s the deadline to send Tax Year 2021 W-2s to employees as well as for submitting the forms to the Social Security Administration, whether you file electronically or on paper.