The IRS authorizes businesses to furnish electronic copies of certain tax forms, instead of a paper copy.
Electronic Form Delivery Benefits
There are many benefits to E-Delivery:
- It can be more cost-effective than traditional form furnishing.
- Immediate form delivery to recipients.
- Physical mail can take longer to arrive and may not be deliverable due to address changes, etc.
- Ability to meet last minute deadlines that physical mail copies cannot meet.
However, electronic form delivery isn’t as simple as just sending forms via email; there are extensive rules and requirements for it.
Electronic Form Delivery Requirements
The requirements for electronic delivery of recipient forms can be found in IRS Publication 1179.
Before you are able to send forms to your employees electronically, you must gain employee consent. There are lengthy consent requirements, and employees can withdraw consent at any time.
Additionally, you must ensure that the electronic copy is formatted correctly and has all of the required data. Recipients must still receive their forms by the furnishing deadline.
If they do not consent to E-Delivery, then a physical copy must be provided by the deadline.
Regarding Consent for Electronic Form Delivery:
- The recipient must affirmatively consent to receiving their forms electronically, and not have withdrawn this consent before the statement is furnished.
- If the recipient does not consent to this, then a paper copy will be provided.
- The scope and duration of the recipients consent must be displayed prominently.
- Directions for obtaining a paper copy must be made available.
- Directions for withdrawing consent must be made available. This may be withdrawn at any time by providing the withdrawal in writing (either electronically or on paper) to the name that appears on the statement (company administrator).
- Confirmation of the withdrawal must also be in writing (either electronically or on paper).
- A notice of termination must be provided (if applicable). The notice must state the conditions in which the statements will no longer be available to the recipient.
- Procedures to update the recipient’s information must be made available.
- A description of the hardware and software required to access, print, and retain a statement must be made available.
- The date in which the statement will no longer be accessible must be made available.
Regarding Format, Posting, and Notifications for Electronic Form Delivery:
- The electronic format must contain all required information and must comply with the guidelines found in IRS Pub. 1179.
- Statements must be posted on a website accessible to the recipient on or before the applicable due date through October 17 of that year; and
- Recipients must be informed, either electronically or by mail, of the posting and how to access and print the statement.
Due to these rules and regulations, sending a PDF copy to your recipients via email will not suffice.
Employer Checklist for E-Delivery
Requesting consent is not enough. As the employer, you must monitor who has consented and mail physical copies to those who have not.
Track employee consent and monitor email and physical mailbox for E-Delivery opt-outs.
As deadline approaches, a physical copy of forms must be mailed to recipients that have not consented to E-Delivery.
Many employers will gather electronic consent as part of their payroll workflow. If you have gathered employee consents outside of your electronic form delivery provider, please make sure they follow the consent guidelines.
Using Electronic Form Delivery can prove to be very beneficial for employers and recipients alike. Among the many benefits are faster receipt, easily accessible via phone or computer, and ability to meet deadlines quicker.
Learn more about your required filing types by using our Essential Guides.
BoomTax, The Boom Post, and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors prior to engaging in any transaction.