Several information reporting changes were included in the recently-enacted omnibus spending and tax extender legislation. These changes are described in more detail below.
Modification of Filing Dates of Returns and Statements
The act modifies the due dates for certain information returns, aligning them with the due dates for employee and payee statements. Specifically, Forms W-2 and W-3, and returns or statements that report nonemployee compensation, such as Forms 1099-MISC, must now be filed by January 31 of the year following the calendar year to which the return relates. In addition, these information returns are no longer eligible for an extended filing date for electronically filed returns. These changes were also part of a broader proposal on rationalizing filing dates contained in the administration’s budget. The new due dates are effective starting with returns and statements relating to calendar year 2016.
Safe Harbor for De Minimis Errors on Information Returns
The act establishes a safe harbor for certain de minimis errors on information returns and payee statements. Under the safe harbor, if the error for any single amount is $100 or less ($25 or less in the case of errors involving withholding), the issuer of an information return or payee statement is not required to file a corrected return. The provision contains an exception whereby the recipient of an incorrect payee statement can elect to have a corrected return issued. This provision applies to returns and statements required to be filed after December 31, 2016.
Modifications to Certain Educational Institution Reporting Requirements (Form 1098-T)
- Requirement to Provide Employee Identification Number
Previously, individuals were not required to identify the school with respect to which they were claiming the American Opportunity Tax Credit (AOTC). Under the act, a taxpayer claiming the AOTC must report the employer identification number (EIN) of the educational institution he or she attended. To facilitate this EIN reporting, the new law also modifies the information reporting requirements for educational institutions to require that the institution provide its EIN on Form 1098-T. This provision applies to tax years beginning after December 31, 2015 and expenses paid after December 31, 2015 (relating to academic periods beginning after that date).
- Reporting must include only qualified tuition and related expenses actually paid
The act requires that schools must report qualified tuition and expenses actually paid by the specific individual. Previously, section 6050S allowed educational institutions to report either amounts the individual paid to the school or amounts the school billed to the individual in the calendar year. Because individuals may only claim a tax credit for amounts they paid in the calendar year, the choice between reporting amounts billed or amounts paid led to confusion among taxpayers and may have prevented some taxpayers from claiming the proper educational tax benefits. A similar change had been proposed as part of the administration’s budget. This provision applies to expenses paid after December 31, 2015.