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IRS Form 1096 Instructions: How and When to File It

Randa Kriss

Staff Writer at Fundera
Randa Kriss is a staff writer at Fundera, where she has written dozens of reviews on ecommerce, merchant services, payroll, and human resources solutions. She has a bachelor’s degree in English and Spanish from Iona College. Randa has written for KNF&T Staffing, PeopleKeep, Zoho, the American Kennel Club, Planted, and Serendipity magazine. Email: randa@fundera.com.
Editorial Note: Fundera exists to help you make better business decisions. That’s why we make sure our editorial integrity isn’t influenced by our own business. The opinions, analyses, reviews, or recommendations in this article are those of our editorial team alone.

When it comes to the various processes and tasks involved in your business accounting, there’s no doubt that taxes can be one of the most complex and time-consuming. With all of the forms you need to complete, like information returns and tax returns, on both a quarterly and annual basis, it’s easy to feel overwhelmed with your business tax responsibilities. Plus, in certain cases, there are returns that require multiple copies or forms, like the W-2 and 1099-MISC. 

This being said, if your business has worked with independent contractors and has to complete annual 1099s, you may have heard of another related form, IRS Form 1096. However, unlike some other business tax forms, Form 1096 only needs to be completed in very particular circumstances. To help you understand how this tax form works, we’ve created this guide. We’ll explain what the 1096 tax form is, who needs to file it, as well as break down step-by-step Form 1096 instructions—so you know how to complete this form for your business taxes

What Is IRS Form 1096?

Unlike some of the other tax forms you’ll have to file for your business, IRS Form 1096 is a little different. To explain, IRS Form 1096, officially known as the Annual Summary and Transmittal of U.S. Information Returns, is—as its official name implies—a summary document. Therefore, IRS Form 1096 is submitted as an accompanying document with other IRS information forms, including forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G. 

Moreover, and perhaps most importantly, IRS Form 1096 only accompanies these information returns when they’re filed by mail. In essence, IRS Form 1096 functions like a fax cover sheet (when sending faxes was still a frequent method of communication)—it’s sent with your completed return to inform the IRS, in a glance, exactly what you’re submitting, so they can quickly and easily direct it to the appropriate next step. 

With this in mind, there are a few additional points that are important to establish with regard to the 1096 tax form. First, like the 1099 or W-2, you cannot simply print IRS Form 1096, fill it out, and submit it with your respective information returns. Since the IRS processes paper forms by machine, you must purchase the correct version of Form 1096, either directly from the IRS or from a third-party retailer, like an office supply store. Additionally, if you use an accounting or payroll software, like QuickBooks, your program may give you the ability to generate and print official versions of IRS Form 1096. If you don’t file the official version of Form 1096, and instead file the printed version from the IRS website, you may face a penalty.

Second, a separate IRS Form 1096 will need to be submitted with each of the different types of information returns we listed above, even if you only fill out one form. For example, if you’re filing 10 1099-MISC forms and one 1098 form, you’ll need to complete two 1096 tax forms—one to accompany the 1099-MISC forms and one to accompany the 1098 form. 

Who Has to File IRS Form 1096

Like we mentioned, you’ll only need to file IRS Form 1096 if you’re submitting your annual information returns to the IRS by mail. If you file these information forms electronically, either through the IRS FIRE System or a tax preparation software, you do not need to complete IRS Form 1096. 

As a small business owner, you would most likely need to file the 1096 tax form with Form 1099-MISC, which reports payments you’ve made throughout the year to independent contractors. However, it’s important to remember that the 1099 is not the only return that requires Form 1096 when you submit by mail. As we stated earlier, if you’re submitting any of the following forms by mail, you’ll also need to file IRS Form 1096: 

  • Form 1097: This form is used by issuers of certain tax credit bonds to report the distribution of their tax credits to the IRS as well as the credit recipients.
  • Form 1098: This IRS form is used to report mortgage interest of $600 or more you’ve received during the year in the course of your business. 
  • Form 1099: On the whole, Form 1099 reports various types of miscellaneous income. It’s important to remember, however, although the 1099-MISC is probably the most well-known version of the 1099, there are 20 different versions of this form. Therefore, if you were filing 1099-MISC forms by mail, as well as Form 1099-A, you would still need to complete a separate Form 1096 for each. 
  • Form 3921: This IRS form is used by corporations to report each transfer of stock to any person related to that person’s exercise of an incentive stock option.
  • Form 3922: This form is used by corporations to report each transfer of the legal title of a share of stock acquired by an employee related to that employee’s exercise of an option granted under an employee stock purchase plan.
  • Form 5498: This form is completed for each person for whom you maintained an IRA account.
  • Form W-2G: This IRS form is used to report gambling winnings and any federal income tax withheld on those winnings.

Once again, you’ll only need to file IRS Form 1096 with any of the above forms if you’re filing returns by mail—and you’ll need to file a separate 1096 tax form for each type of return you’re submitting. It’s also important to note that if you’re filing 250 or more of any one type of information return, more than likely, the 1099-MISC form, you have to file electronically and therefore, you would not have to complete IRS Form 1096. If you are required to file electronically and do not do so, you can face a penalty from the IRS.

Finally, if you’ve already filed one of the above information returns and need to make a correction, you’ll have to file a new copy of IRS Form 1096 with the corrected return as well.

IRS form 1096

How to File IRS Form 1096

Now that we’ve discussed what Form 1096 is and who has to file it, let’s explain how to file this form. As we’ve emphasized thus far, IRS Form 1096 only needs to be filed when you’re submitting one of the above information returns by mail. 

Therefore, a separate Form 1096 will need to be mailed to accompany each of the different versions of the above forms that you’re filing by February 28. However, if you’re filing the 1099-MISC form to report “NEC” or non-employee compensation—meaning you’re reporting payments your business has made to independent contractors—you’ll need to submit this form and the accompanying Form 1096 by January 31. Form 5498, on the other hand, must be submitted by June 1.

This being said, in order to correctly file IRS Form 1096, you’ll complete the form for each of your information returns (remembering that you must use an official version of Form 1096 and not print the PDF from the IRS website) and then group the forms by form number. The IRS recommends that if you’re filing Form 1099-MISC, you do so as a separate shipment. Additionally, if you’re filing 1099-MISC forms for payments you’ve made to contractors, even though you need to send Form 1096 to the IRS, you do not need to include this form when you provide your contractor with their 1099 copy.

The address that you mail your completed information returns and 1096 tax forms to will depend on your business’s location—so you’ll want to review the IRS Form 1096 PDF to ensure that you’re mailing to the correct IRS address. Moreover, the IRS provides additional instructions with regard to filing paper returns in their overall 1099 instructions document, including specific information about staples, print type, etc., so you should also refer to these points, starting on page nine, before mailing your returns. 

Along these lines, the 1099 instructions document also lists exceptions for a handful of low-volume returns that can be filed with the printed-PDF version of Form 1096 from the IRS website. These returns are:

  • 1097-BTC
  • 1098-C
  • 1098-MA
  • 1098-Q
  • 1099-CAP
  • 1099-H
  • 1099-LTC
  • 1099-Q
  • 1099-QA
  • 1099-SA
  • 3921
  • 5498-ESA
  • 5498-QA
  • 5498-SA

Therefore, if you’re submitting any of these IRS business forms, you can simply print the form and Form 1096 from the IRS website, fill them out, and mail them to the correct IRS address based on your business location.

Form 1096 Instructions

Although there are several nuances associated with who needs to file and how to file IRS Form 1096, the form  itself, only a single page, is actually very simple. This being said, then, let’s break down our step-by-step Form 1096 instructions—explaining exactly what you need to do to complete this form.

Step 1: Complete your business’s information returns.

Before you can get started filling out IRS Form 1096, you’ll need to complete the necessary information returns for your business, whether your 1099-MISC forms, or any of the other forms we listed above. The information on these returns, as well as the number of returns and the different versions you’re submitting, will be relevant to completing Form 1096. 

Once these forms are completed, you’ll know how many separate 1096 tax forms you’ll need to fill out. If you’re only submitting Form 1099-MISC, you’ll only need to complete one 1096 tax form. On the other hand, if you’re submitting Form 1099-MISC, Form 1098, and Form 3922, you’ll need to fill out a 1096 for each of these groups. 

Step 2: Fill in the basic information at the top of IRS Form 1096.

For the sake of simplicity, we’ll continue our Form 1096 instructions assuming you only need to complete one 1096 tax form. However, if you need to submit multiple versions of the form, you can easily repeat the following steps for each form.

This being said, once you’re ready to begin filling out IRS Form 1096—first ensuring that you have the official version of the form—you’ll start with the boxes in the upper left hand corner, as you can see below. 

In these boxes, you’ll fill in your name, street address, city, state, country, and zip code. Underneath this section, you’ll also fill in your phone number, email address, and fax number, as appropriate. In the box labeled “name of person to contact,” you might put your business accountant or tax advisor, if you’ve worked with them to complete these tax forms and would prefer the IRS contact them, if necessary.

IRS Form 1096

Step 3: Complete box 1 or 2, plus box 3.

Next, you’ll continue down the form and fill in boxes 1 and 2. In box 1, you’ll enter your employer identification number, or EIN, if you have one. If you’re a sole proprietor and have an EIN, you’ll fill in this number in box 1—if you don’t have an EIN, you’ll fill in your social security number in box 2. It’s important to note that you’ll complete either box 1 or 2, as it applies to you, not both. Therefore, even if you’re a sole proprietor who has an EIN as well as a personal social security number, you would only fill in your EIN in box 1.

Additionally, you’ll want to ensure that the number you provide in this section matches the number you used on the information returns you completed.

Then, in box 3, you’ll enter the number of forms you’re submitting with this 1096 tax form. If you’re submitting, for example, 10 separate 1099-MISC forms, you’ll write “10.” It’s important to mention that you’re entering the number of forms, not the number of pages—so even if you have 10 completed forms, but some of them have two pages, you’ll still only write “10” in box 3.

Step 4: Complete box 4 and 5.

Next, you’ll fill in box 4, which asks for “federal income tax withheld.” This number will be based on the information returns you’re filing with this Form 1096—meaning you’ll add up any federal income tax withheld as indicated on those forms and write the total in this box. If you didn’t withhold any federal income tax, you’ll write “0.”

In box 5, you’re asked for the “total amount reported with this Form 1096.” This number will be specific to the type of information return you’re filing with your Form 1096. If you’re filing Form 1098-T, 1099-A, or 1099-G, you can leave this box blank. However, if you’re filing any of the other relevant information returns, you’ll enter the number that corresponds to a particular box on that form according to the instructions within the IRS Form 1096 PDF online (as listed below). If your form asks for a number from more than one box, you’ll add the numbers in those boxes together and fill in the total in box 5.

  • Form W-2G: the number in box 1
  • Form 1097-BTC: the number in box 1
  • Form 1098: the numbers in boxes 1 and 6
  • Form 1098-C: the number in box 4c
  • Form 1098-E: the number in box 1
  • Form 1098-F: the number in box 1
  • Form 1098-Q: the number in box 4
  • Form 1099-B: the numbers in boxes 1d and 13
  • Form 1099-C: the number in box 2
  • Form 1099-CAP: the number in box 2
  • Form 1099-DIV: the numbers in boxes 1a, 2a, 3, 9, 10, and 11
  • Form 1099-INT: the number in boxes 1, 3, 8, 10, 11, and 13
  • Form 1099-K: the number in box 1a
  • Form 1099-LS: the number in box 1
  • Form 1099-LTC: the number in boxes 1 and 2
  • Form 1099-MISC: the number in boxes 1, 2, 3, 5, 6, 7, 8, 10, 13, and 14
  • Form 1099-OID: the number in boxes 1, 2, 5, 6, and 8
  • Form 1099-PATR: the number in box 1, 2, 3, and 6
  • Form 1099-Q: the number in box 1
  • Form 1099-QA: the number in box 1
  • Form 1099-R: the number in box 1
  • Form 1099-S: the number in box 2
  • Form 1099-SA: the number in box 1
  • Form 1099-SB: the number in box 1 and 2
  • Form 3921: the number in boxes 3 and 4
  • Form 3922: the number in box 3, 4, and 5
  • Form 5498: the number in boxes 1, 2, 3, 4, 5, 8, 9, 10, 12b, 13a, and 14a
  • Form 5498-ESA: the number in boxes 1 and 2
  • Form 5498-QA: the number in boxes 1 and 2
  • Form 5498-SA: the number in box 1

Step 5: Complete box 6 and 7.

After you’ve completed box 5, you’ll move on to box 6. Box 6 will ask you to indicate which information return you’re submitting by marking an “x” in the corresponding space provided. Therefore, if you’re filing Form W-2G, you’ll mark an “x” in the first box in the row. It’s important to remember, you’ll only be marking one “x” within this space. If you’re filing multiple types of information return, you’ll be completing a separate IRS Form 1096 for each of them. 

Then, you’ll mark a check in box 7 if you’re filing this Form 1096 with 1099-MISC forms that report NEC, or non-employee compensation. As we mentioned earlier, NEC would apply to your business if you’re filing 1099-MISC forms to report payments you’ve made to independent contractors. If this is the case, you would check box 7; if not, you would leave it blank. 

Step 6: Review Form 1096 and file with the IRS.

Once you’ve completed boxes 6 and 7, the main part of your Form 1096 is complete. Now, you’ll want to review the form to ensure that everything is correct and sign, date, and provide your title at the bottom of the form. 

After you’ve signed this form, you’ll be ready to package it with your corresponding information returns and file them with the IRS. As we mentioned earlier, the IRS states that you should organize these returns based on form number, with Form 1096 on top, separating each different type of return. Additionally, if you’re filing 1099-MISC forms, the IRS recommends that you mail these, with the 1096 tax form, separately from any other type of return. 

Before mailing any returns, however, you’ll also want to ensure that you’ve saved copies for your records, in case you need them at a future date for financial planning or a business audit. After you’ve made your own copies, you can mail the original versions to your designated IRS address, shipping the forms in a flat mailer. Once again, the due date for most of these returns is February 28, with the exception for Form 1099-MISC to report NEC, which has a deadline of January 31 and Form 5498, which has a deadline of June 1. The IRS will consider the deadline met as long as the form is properly addressed and mailed on or before the due date. 

IRS Form 1096

1096 Tax Form: Tips for Small Business Owners

As you can see, the Form 1096 instructions aren’t too complicated—as a summary document, it’s not too difficult to complete this tax form. Nevertheless, there are still certain actions you can take to make this particular tax process easier. Therefore, let’s discuss some tips for completing IRS Form 1096 and its corresponding information returns. 

File Electronically

Our first tip to streamline your tax processes, including information and other tax returns, is to file electronically. If you file your information returns through the FIRE system, you won’t have to worry about Form 1096 at all, as it only applies to mailed returns and the relevant information it provides the IRS is incorporated into the online system process. Additionally, by filing electronically, you’ll save time, effort, money, and hopefully, have your returns processed faster with fewer errors.

Although you may be hesitant to take your tax processes online, especially if you have a smaller business, the benefits certainly outweigh the hassle involved with manually completing tax forms and mailing them to the IRS.

Moreover, if you decide to file electronically, you can easily opt to outsource your tax processes to a software, service provider, or other tax professional to either work with you or completely file on your behalf. Even though you’ll have to pay any associated costs to work with those services or professionals, you’ll have much greater peace of mind with regard to your tax forms and you’ll have time to invest into other parts of your business operations. 

Invest in Accounting or Payroll Software

Continuing off our previous point about tax-related software, whether you decide to file electronically or by mail, it’s always worth investing in an accounting or payroll software. With either of these software products, you’ll be able to automate your processes and you’ll have quick access to the information you’ll need to complete your business taxes. 

In addition, utilizing one of these types of software will make it easier to work with any business accountant, advisor, or a tax professional. Moreover, as we’ve mentioned, many software systems can either provide you with the official version of IRS forms, like Form 1096, that you’ll need to complete, or they can allow you to complete the entire process online through their platform. For example, if you use QuickBooks for your accounting software, you can utilize the Intuit 1099 e-file service—which imports the relevant information from your accounting platform, generates 1099 forms, and allows you to file them with the IRS online.

Work With a Professional

Once again, whether you file electronically or by mail, it’s always worthwhile to work with or consult a business tax professional, like a CPA or enrolled agent. As we’ve discussed, business taxes are complicated and extremely involved. Taking the 1096 tax form as an example, although the form itself is not complex, there are many specifics, restrictions, and best practices associated with filing this one form. 

By working with a tax professional, you’ll have an expert to consult who will know the ins and outs of these forms and who will be able to answer your questions and ensure that you’re completing all the forms you need to—and that you’re doing so correctly and on-time. Just as is the case with accounting or payroll software, you’ll have to pay a professional for their services; however, hopefully by investing in their expertise, you’ll avoid additional time and hassle (as well as IRS fines) that you might have experienced otherwise.

IRS Form 1096: The Bottom Line

At the end of the day, Form 1096 is a relatively straightforward business tax form, once you sort through all the nuances involved with who needs to file it and how you do so. This being said, although some business owners, especially those that own particularly small businesses, are hesitant to opt for filing their taxes electronically, we’d strongly recommend that you consider it. The IRS, in fact, recommends that business owners file electronically as well. 

Even though the FIRE system may seem intimidating at first, once you’ve set yourself up and gone through one round of tax filings, you’ll quickly see how much time and effort you’re saving by not filing your business tax forms by hand. Additionally, if you don’t want to file using the online system yourself, you can easily work with a business tax advisor or software provider who can file your taxes electronically on your behalf. 

Ultimately, by taking your business taxes online, you’ll not only be saving time and effort, but you won’t have to complete IRS Form 1096 at all—one less form to worry about.

Randa Kriss

Staff Writer at Fundera
Randa Kriss is a staff writer at Fundera, where she has written dozens of reviews on ecommerce, merchant services, payroll, and human resources solutions. She has a bachelor’s degree in English and Spanish from Iona College. Randa has written for KNF&T Staffing, PeopleKeep, Zoho, the American Kennel Club, Planted, and Serendipity magazine. Email: randa@fundera.com.

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