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IRS Form 1096

The ISR 1096 Form is designed to report the Annual Summary on tax returns and transmit other respective forms to the Internal Revenue Service (shortly known as the IRS). There is a great variety of tax return reports in the US, and most of them are hard to comprehend for an unprepared person. That is why we are here to help you get acquainted with the 1096 Form and its primary purpose.

Business people running small enterprises often hire independent contractors to perform work for them. They have to report those expenses to the IRS once the current fiscal year is over. The subject independent contractor is considered a non-employee getting income (exceeding $600 in one period) for working for the enterprise during a designated fiscal period.

Below we will tell you some more about the form, its application rules, and requirements and give you guidelines on filling out the document in 2021.

Reasons to File the Form and Its Due Date

As we have briefly mentioned above, people use the 1096 Form to cover and report payments (over $600 per one contractor) made in favor of the non-employee working for the subject company during a particular (usually the current one) financial year.

Entrepreneurs need to use this form to report specific tax return info. They are not filing for themselves or the subject enterprise but rather for the middlemen they hired to do specific work for them. People also can use this legal form to transmit other personal tax returns and information returns, using the 1096 Form as a summary. There is a comprehensive list of IRS Forms for personal returns and tax-related information that you have to disclose along with the 1096 Form. We strongly advise you to get acquainted with it on the official IRS website.

The due date of Form 1096 directly depends on the respective IRS form it is used with. Thus, the Form will be due at the end of February of the current financial year if used with Forms 1097-99 and 3921-22 or Form W-2G; the Form will be due by the end of May of the current year if used with any 5498 Form.

Please note that you cannot file this form electronically; all electronic versions of the Form are presented for your information only and are restricted to that purpose (and that is why the electronic version always comes in red ink).

As we have mentioned, you cannot file the 1096 Form electronically, but there is one exception: you can do so if you are responsible for filing 250+ documents of this kind. Plus, you are legally obliged to get a waiver for performing such a procedure, or else you will be subject to a penalty for misusing this legal form.

The year 2021 has brought a lot of novelties concerning most of the IRS forms upon their users. The IRS has changed some Submission Centers info, so now the users need to keep tabs on that issue. But there is also some good news and changes the users can count on this current fiscal year: the 250+ filing requirement can potentially be eliminated for those filing the tax returns information reports in 2022 for the financial period of 2021.

The thing is, back in 2019, the federal legislative branch had passed the Taxpayer First Act (enacted on the 1st of July 2019). By this respective Act, the authorized Department of the Treasury, along with the IRS, is entitled to reduce the mentioned requirement for tax returns submitted for 2021. But until the respective services declare their final decision (or at least an intention), the restrictions still apply. Check the IRS official website for refreshments and the newest info.

Who Should File the Form?

The independent contractor you pay money to do specific work has to file their tax returns based on the income they get from working for your company, and the non-employee has to fill out and file Form 1099 for this purpose. However, the contractor cannot file Form 1099 solely but only in combination with a completed Form 1096. And that is exactly why this form is called transmittal.

So, the non-employee worker has to report their non-salary profit to the IRS, and they can (and should) use Form 1099 to do so. Once you receive a 1099 Form report to prove the non-salary income tax returns that belong to another person, you should, in turn, prepare the 1096 Form. In this case, you will be reporting information returns on behalf of the “Nominee” (or “Middleman”) and become a Nominee recipient.

Having prepared all the respective documents, you must file the 1096 and 1099 Forms to the IRS Submission Processing Center in the area of your company’s jurisdiction. Please note that the addresses of some Processing Centers have changed in 2021. Go to the official IRS website to check the relevant info on your Submission Center.

Other IRS Forms for Self-employed

IRS forms are used for a variety of functions and to meet the demands of diverse taxpayer groups. If you haven’t yet discovered the right form for your purposes, take a look at some of the others.


How to Fill Out the 1096 Form

You can find the respective forms on the IRS official website. But please note that not all of these forms can be submitted electronically; most of them can only be submitted in writing and on paper.

The Revenue Service has renewed some of its compilation requirements and norms in 2021. We follow all the refreshments and try to keep up with the contemporary legislature, and you can check the relevant form template on our website as well. However, we have to warn you that you cannot download any electronic versions of the document and present them to the IRS, as all submitted versions must be scannable. The IRS uses their software, and a printed version will most likely not be scanned properly and will be recognized void. You, in turn, may be subject to a penalty for submitting an unlawful form, so be careful with all your filings. Thus, you can only preorder the relevant Form template that you can later fill out and file at the IRS office.

Enter the Filer’s Name and Address

You are the official Filer of the 1096 Form, so put your full legal name in the blank line and insert your mailing address in the line below, including street, room, or suite number, city/town, state, country, ZIP; use a foreign postal code for offices located abroad.

step 1 enter the filer’s name and address - filling out an irs form 1096
Provide Contact Info

You should appoint a person responsible for maintaining contact with the respective services if any questions occur. Insert the full name of that contact person, their daytime contact number, E-mail, and fax number into the relevant empty boxes.

step 2 provide contact info - filling out an irs form 1096
Insert the Taxpayer Information

There are two boxes in this form where you can enter your taxpayer’s information. In Boxes one and two, you should either enter an EIN or an SSN (but not both). Sure, there is a difference: if you are an individual not involved in any kind of business or trade, ensure to insert your SSN in the corresponding box. If you are a sole proprietor (or any other business representative), you should provide your EIN in the corresponding box. Mind that if you do not have an EIN for some reason, you should also provide your SSN. Pick either Box 1 or 2 and leave the other box empty.

step 3 insert the taxpayer information - filling out an irs form 1096
Ensure to insert the same taxpayer identification number (or SSN) that you are using in the other accompanying form you are about to file with the Revenue Service.

Define the Total Number of Forms Covered

Here, you must enter the precise quantity of legal forms you are willing to transmit with this particular Form 1096. Usually, it is two. Please note that only the forms filled out accurately (copies, not pages) shall go on your total count; exclude all voided forms from the total amount.

step 4 define the total number of forms covered - filling out an irs form 1096
People often ask how many copies of the 1096 Form one shall fill out and file with the IRS, which is a very important question, as this particular form is transmittal and this term always causes confusion amongst users. Finally, we have a clear answer: you should file as many 1096 Forms as you file accompanying IRS Forms. But there is another trick: if you have more than 250 filings on your hands that you personally have to prepare and file, you should send the documents out electronically. It is the only lawful reason for an electronic filing.

Enter Tax Amount Withheld and Reported

Here, you must enter the amount (in US dollars) of the federal income taxes that were withheld and reported to the respective authorities by the subject middleman. If you are submitting this form alongside Form 1098-T, 1099-A, or 1099-G, you must leave these boxes empty. In all other cases, you shall provide the exact amount in the correct box.

step 5 enter tax amount withheld and reported - filling out an irs form 1096
Mark the Form You Are Submitting Alongside

In Section 6, you will find a list of forms that you must submit only in combination with the 1096 IRS Form. Tick the box with the corresponding form’s name (note that you may only pick one for each information return transmittal form).

step 6.1 mark the form you are submitting alongside - filling out an irs form 1096
Form 1096 comes with a set of instructions regarding the rules and requirements for its completion and statements concerning the renewed legislature. We strongly advise you to get acquainted with those before you proceed to complete the forms.

step 6.2 mark the form you are submitting alongside - filling out an irs form 1096