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W-2 vs 1099: Deadlines, Differences, and Filing Requirements

Every business that pays people — whether employees or independent contractors — has year-end filing obligations. W-2s go to employees. 1099s go to contractors and other payees. The deadlines, penalties, and rules for each are different, and missing them can result in hundreds or thousands of dollars in fines. This guide covers everything you need to know about W-2 and 1099 deadlines for the current tax year.

W-2: Who Gets One and When

Form W-2, Wage and Tax Statement, is issued to every person who received wages as an employee during the calendar year. This includes full-time employees, part-time employees, and S-Corp shareholder-employees who receive a salary. The W-2 reports total wages paid, federal income tax withheld, Social Security and Medicare taxes withheld, and state/local tax withholdings.

The filing deadlines for W-2s are straightforward:

Both the employee copies and the SSA filing share the same January 31 deadline. There is no separate "mail to employee" vs. "file with government" split like there used to be. If January 31 falls on a weekend, the deadline moves to the next business day.

W-2s are filed with the SSA using Form W-3 (Transmittal of Wage and Tax Statements), which summarizes all W-2s issued. Most employers file electronically through the SSA's Business Services Online (BSO) portal. The SSA shares the data with the IRS.

1099-NEC: Nonemployee Compensation

Form 1099-NEC reports payments of $600 or more to independent contractors, freelancers, and other nonemployees for services performed for your business. The 1099-NEC replaced Box 7 of the 1099-MISC starting in 2020.

Common situations that require a 1099-NEC:

• You paid a freelance web designer $2,000 for your website
• You paid a bookkeeper $600 or more as an independent contractor
• You paid an attorney $600 or more for legal services (attorneys always get a 1099, even if they are a corporation)
• You paid commissions to non-employee sales agents

You generally do not issue a 1099-NEC for payments made to corporations (C-Corps or S-Corps), except for attorney fees and medical/health care payments. You also do not issue 1099s for payments made via credit card, debit card, or payment platforms like PayPal — those are reported by the payment processor on Form 1099-K.

Like the W-2, the 1099-NEC has a single unified deadline of January 31 for both recipient copies and IRS filing. No extensions are available for filing the 1099-NEC with the IRS.

1099-MISC: Other Income Types

Form 1099-MISC reports other types of payments that do not belong on the 1099-NEC. Common 1099-MISC payments include:

• Rent payments of $600 or more (Box 1)
• Royalties of $10 or more (Box 2)
• Prizes and awards of $600 or more (Box 3)
• Fishing boat proceeds (Box 5)
• Medical and health care payments of $600 or more (Box 6)
• Crop insurance proceeds (Box 9)
• Attorney payments of $600 or more (Box 10 — gross proceeds to attorneys)

The 1099-MISC has different deadlines depending on how you file:

E-Filing Requirements

The IRS has been steadily lowering the e-filing threshold. For returns filed in 2026 (covering tax year 2025), if you file 10 or more information returns of any type combined (W-2s, 1099-NECs, 1099-MISCs, etc.), you are required to e-file. This threshold was reduced from 250 returns. Most payroll services and accounting software support electronic filing. The SSA's BSO portal handles W-2 e-filing, while the IRS FIRE system or IRIS portal handles 1099 e-filing.

Key Differences at a Glance

Penalties for Late Filing

Penalties for late W-2 and 1099 filings are assessed per form and increase the longer you wait:

• Within 30 days of deadline: $60 per form
• More than 30 days late, but by August 1: $120 per form
• After August 1 or not filed: $310 per form
• Intentional disregard: $630 per form with no maximum cap

Small businesses (gross receipts of $5 million or less) have reduced maximum penalties, but even the reduced caps can be painful. A business that files 20 W-2s and 15 1099-NECs more than 30 days late faces $120 x 35 = $4,200 in penalties. For a full breakdown of IRS penalty structures, see our IRS late filing penalties guide.

Collecting W-9s Before Year-End

The best way to avoid scrambling in January is to collect Form W-9 from every contractor before making the first payment. The W-9 provides the contractor's legal name, address, TIN (SSN or EIN), and entity type — all the information you need to prepare a 1099. If a contractor refuses to provide a W-9, you are required to withhold 24% of payments as backup withholding. Build W-9 collection into your onboarding process for contractors.