What Are 1096 Tax Forms? How To Use It?

What Are 1096 Tax Forms

If you own a small business and hired an independent third party to work for you this year, you’ll almost certainly need to file IRS Form 1096. What is the purpose of Form 1096? Who needs to make a claim? What’s more, how would it work? 

TAX form 1096 is needed by companies to disclose additional payments made to individuals and other firms in the conduct of their operations. Failure to abide by the 1096 reporting requirements might result in penalties. 

Reporting non-employee remuneration on Form 1096 could be compared to declaring non-employee income on Form W-3 (Transmittal of Wage and Tax Statement). If a company works with private consultants, they must provide them with a Form 1099-NEC at the end of the fiscal year if you paid them more than $600. The IRS uses the information on Form 1099 to verify that the contractor or self-employed individual recovers any money generated during the tax year for which they are submitting their returns. When they deliver Form 1099 to your contractors, they must also file IRS Form 1096.

Who Is Supposed To File Form 1096?

Form 1096 must be used if your firm mails informative returns to the IRS. Depending on how many different information forms are provided, you may require numerous copies of Form 1096. To determine the specific requirements for Form 1096 and ensure compliance, see this professional tax attorney as they can provide expert guidance tailored to your unique situation. This will help you avoid potential penalties and streamline your tax filing process effectively.

How Many Forms 1096s Must I Submit?

You must include a Form 1096 cover page with every Form 1099, 1097, 1098, 3921, 3922, 5498, 8935, and W-2G you mail to the IRS. Because each form has its own 1096, each 1096 should only include one “X” mark in box 6.

It’s important to remember that the IRS recognizes each version of Form 1099 as a different form, and there are 16 multiple variations of Form 1099. Remember that you should file online if you need to send 250 or more copies of Form 1096. Failure to do so might result in an IRS penalty.

Where Can One Obtain A Form 1096?

Even though many forms may be filed online at IRS.gov, Form 1096 is unique. Because this form’s purpose is to serve as a cover sheet for paper forms, it must be presented as a paper form. Form 1096 can be downloaded, but it must be printed and mailed. Furthermore, the IRS employs sensor technology that enables a collection of physical paperwork, so be sure users must submit a scannable form.

As a result, you must utilize an original IRS form. Forms can be ordered online at IRS.gov/forms. You may also call 1-800-TAX-FORM to get the form.

How To Fill Out IRS Form 1096?

Form 1096 should include specific information, such as your name, address, contact and fax numbers, and email address. You must also keep track of your company’s FEIN (Federal Employer Identification Number) or your Ssn.

With Form 1096, keep track of the total number of forms you’re mailing. You must also enter the total amount of money you documented on the relevant information returns.

Finally, you’ll need to cross off the type of form you’re submitting. If you’re submitting Forms 1099-NEC, for example, check the box. 

How Do I Handle Overseas Workers While Being Compliant?

Although you can make payment to your employees using paystubs, as per the IRS definition of a contracting company, the 1096 form is exclusively used by contractors. Of fact, other countries’ definitions of workers may differ. This complicates categorization and compliance, especially if your employees live in more than one country. Improper categorization can result in fines, penalties, and legal action. 

It’s quite difficult to manage remote workers internationally—since rules differ from nation to nation. You might wish to think about outsourcing global payroll. Remember that hiring workers in foreign countries is hard without a local legal company. Regrettably, forming a local legal company is both time-consuming and costly. An employer of record may be able to assist but be certain that your selected partner owns its legal companies and does not subcontract the job. 

What Is The Deadline For Submitting Form 1096?

The deadline for most information returns, including Form 1096, is February 28, the year after the tax year. So, for the tax year 2022, you’ll need to send in your paperwork no later than February 28, 2022. The deadline for sending a copy of a reprocess to a non-IRS recipient is normally January 31; after the tax year you are filing.


Organizations should have systems to guarantee compliance with increased tax reporting obligations as the employment landscape continues to alter and arrangements with independent contractors become more widespread. HR professionals can help with payroll management and tax filings for independent freelancers. 

Although tax filing can be intimidating, it is critical that you complete it accurately and on time to avoid fines. Form 1096 adds a little extra legwork, but not much. The best course of action is to begin planning for tax season as soon as possible. Don’t put off gathering information and filling out forms until a few weeks before you have to file your taxes. Allow enough time for you, your financial team, and your accountant to complete, review, and send everything to the IRS.


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