Avoid W-2 and 1099 Penalties: A Business Guide to Year-End Information Returns

Information returns, such as W-2s and 1099s, are a crucial aspect of year-end planning. To stay compliant and avoid costly penalties, make sure to file these forms accurately and on time. Penalties can result from late submissions, missing information, or even small mistakes — things that are easy to overlook without a solid process in place.

Beyond regulatory compliance, proper completion and submission of these forms can also prevent significant financial setbacks for your organization. To help you avoid penalties, we’ve outlined key deadlines and the instances when you may receive a penalty as a taxpayer.

Types of Information Return Penalties

There are two separate penalties your business can face for information returns.

1. Penalty for not filing correct information returns

This penalty may apply to you if you:

• Didn’t file by the necessary due date and you don’t show reasonable cause for why your return was late
• Were supposed to file electronically, but you filed on paper instead
• Didn’t report a Tax Identification Number (TIN) or reported an incorrect TIN
• Filed paper forms that weren’t machine readable

2. Penalty for not providing correct payee statements

This penalty may apply to you if you:

• Didn’t provide correct payee statements by the necessary date and don’t show reasonable cause for why you missed the deadline
• Didn’t provide all the necessary information on the statement
• Provided incorrect information on the statement

Information Return Penalties Still Matter, Even If You Don’t Owe Tax

Information return penalties will vary depending on when the return was due, how late it was filed, and if you intentionally did not file a form.

*Per return or statement, or 10% of the aggregate amount required to be reported (whichever is greater).

Common Forms and their Filing Requirements

There are several types of information returns that may be required to be filed by your business. Filling out the correct information takes time, but missing necessary details can cost more. Be sure to walk through each form and box to confirm you have the correct information listed for that specific section.

Here are the filing requirements for the most common forms:

Note: The standard deadline for forms W-2, W-3, 1099-NEC, and 1099-MISC (Copy B) is January 31, but since that date falls on a Saturday in 2026, the due date has been moved to the next business day: Monday, February 2, 2026 .

Avoid Information Return Penalties with Effective Year-End Planning

The penalties for information return errors can add up quickly — but with the right process in place, they’re largely avoidable. Taking a proactive approach now helps you stay ahead of filing requirements, safeguard your financial health, and start the new year on solid footing.

Eide Bailly’s experienced advisors work with businesses to simplify year-end planning and avoid costly penalties. If you’re unsure where to begin, we’re here to help you navigate the details with clarity and confidence.