Form 1096 is a document filed on behalf of businesses with the United States Internal Revenue Service (IRS) to accompany forms filed to report non-employee income. It summarizes information included in Forms 1097, 1098, 1099, 3921, 3922, 5498, and Form W-2G. Form 1096 is only required if you’re filing your return by mail.

How can you get ahold of Form 1096?

As Form 1096 cannot be printed out, you have to purchase a correct version of Form 1096 directly from the IRS or from a third-party retailer, like an office supply store. Sometimes, payroll software companies such as QuickBooks include access to Form 1096 in their platform.

Why is Form 1096 important?

In most circumstances, a Form 1096 is filed by a small business owner alongside a Form 1099-MISC, which is used to report payments made throughout the year to independent contractors. 

In addition, Form 1096 accompanies Form 3921, which is used by corporations to report each transfer of stock to any person related to that person’s exercise of an incentive stock option. For example, if an Oyster customer granted stock to an Oyster team member under its stock plan, a Form 1096 must be filed with the IRS. 

The same accompanying reporting and filing obligation would apply in the context of Form 5498, which is completed for each person for whom an employer maintains an IRA account. In instances where an IRA is maintained on behalf of an Oyster team member, an Oyster customer must file a Form 1096 along with Form 5498. 

There is a preferred mechanism and process for filing a Form 1096, so you should consult your accountant or qualified tax professional before filing. Remember, the form is informational in nature, and it is only required if you are filing your returns by mail. 

What must be included in Form 1096?

You’ll need the following information to complete Form 1096:

• Your EIN or your SSN if you don’t have an EIN (in either instance, you should ensure the number you provide matches the number used on the information returns you completed, like a 1099-MISC);
• The number of forms you’re submitting with the 1096 tax return;
• Any federal income tax withheld;
• The total amount reported with Form 1096; and
• The information you’re submitting in connection with Form 1096 (for example, you’ll mark an “x” by 1099-MISC that’s being submitted with Form 1096).

Your returns, if mailed, should be organized based on form number, with Form 1096 on top. At that point, you should review your returns with your accountant or a qualified tax professional for accuracy before filing by mail.

Do you have to file a Form 1096?

If you file electronically through the FIRE system (“Filing Information Returns Electronically”), you don’t need to worry about filing a Form 1096 at all. In addition, Publication 1220 has more information about e-filing a Form 1096. The information the form otherwise provides is incorporated into the online process. The information captured in Form 1096 is also often included in a third-party software solution.

When is the deadline for filing?

The deadline for filing a Form 1096 is between January 31st and March 31st, depending on the manner of filing and the accompanying information included in the filing.

What happens if you file late?

If you file a Form 1096 late, the penalty is $50 per form if you submit within 30 days of the due date. The penalty then increases to $100 per form. 

If you fail to file by August 1st, the penalty increases to $260 per form. If you intentionally fail to file, the penalty increases to $530.

Disclaimer: This article and all information in it is provided for general informational purposes only. It does not, and is not intended to, constitute legal or tax advice. You should consult with a qualified legal or tax professional for advice regarding any legal or tax matter and prior to acting (or refraining from acting) on the basis of any information provided on this website.