1099 & W-2 Late Filing Penalty Calculator IRC § 6721/6722

For 2025, penalties range from $60 to $330 per return depending on when you correct the error. Tier 1 ($60/return): corrected within 30 days. Tier 2 ($130/return): corrected by August 1. Tier 3 ($330/return): corrected after August 1 or never. Intentional disregard: $660/return or 10% of reportable amount (no cap). Penalties apply separately for failing to file with the IRS (§ 6721) and failing to furnish statements to recipients (§ 6722).

IRC § 6721 penalizes failure to file correct information returns WITH THE IRS (the Copy A you send to the IRS). IRC § 6722 penalizes failure to furnish correct payee statements TO THE RECIPIENT (the copy you give to contractors, employees, etc.). Both penalties can apply independently to the same return, potentially doubling your total penalty.

Yes. Businesses with average annual gross receipts of $5 million or less for the 3 preceding tax years qualify for lower maximum penalties. For 2025: Tier 1 cap is $232,500 (vs. $664,500 for large businesses), Tier 2 cap is $664,500 (vs. $1,993,500), and Tier 3 cap is $1,329,000 (vs. $3,987,000). There is NO cap for intentional disregard penalties.

Intentional disregard means you knew or should have known the information was required but chose not to file it correctly anyway. The penalty is the greater of $660 per return OR 10% of the total reportable amount. There is no maximum cap. Examples include: knowingly using incorrect TINs, deliberately omitting required information, and filing false statements.

W-2 and 1099-NEC are due January 31 to both the IRS and recipients. Most other 1099s are due to recipients by January 31, and to the IRS by February 28 (paper) or March 31 (e-file). The 5498 series is due May 31. E-filing is required if you file 10 or more information returns of ANY type—failure to e-file when required results in Tier 3 penalties.

If you file 10 or more information returns of any type (combined across all forms), you MUST e-file. Filing paper returns when e-file is required means the IRS treats your returns as NOT FILED, triggering Tier 3 penalties ($330/return for 2025). This threshold was reduced from 250 to 10 starting in 2024.

Yes, reasonable cause relief is available. You must show you exercised ordinary business care and prudence but could not file on time due to circumstances beyond your control. Common defenses include: reliance on incorrect TIN from payee, system failures, and natural disasters. First-time filer correction procedures may also reduce penalties for certain de minimis errors.

The de minimis exception allows a limited number of information returns with small dollar errors to avoid penalties. Returns showing incorrect dollar amounts are treated as correct if: the error is $100 or less, or the error is $25 or less for withheld tax amounts. This exception has limits on the total number of returns that qualify.