The Iowa Department of Revenue is proposing to change the deadline for filing the annual Forms VSP, Verified Summary of Payments Report, W-2 and 1099 with the Department from January 31 to February 15. The new deadline would also apply to when Forms W-2 and 1099 must be furnished to employees. The change in regulation would affect calendar year 2019, making the deadline February 15, 2020.

The proposed regulation changes would also provide that only Forms W-2 and 1099 that reflect Iowa state withholding would need to be submitted to the Department.

Department proposes to address challenges encountered during the 2018 filing season

In 2016, the Department implemented new filing requirements for Forms VSP, W-2 and 1099. For tax years 2016–2017, only withholding agents with at least 50 employees were required to electronically file Forms W-2. For tax year 2018, all withholding agents were required to electronically file W-2 and 1099 forms. The deadline for filing was changed to January 31; however, the Department extended the deadline to February 28, 2019, for calendar year 2018 forms.

Based on the challenges many withholding agents experienced during the 2018 filing season, the Department is proposing to amend its regulations to require that employers only need to file these forms for employees from whom Iowa state tax was withheld. The Department also proposes to move the relevant annual filing deadline from January 31 to February 15. Because January 31 is a filing deadline for a variety of other forms and claims, the Department hopes that delaying the deadline will improve its ability to respond to withholding agents who contact the Department for assistance.

For calendar years 1999 through 2015, employers were not required to submit Forms W-2/1099 to the Department. Employers were only required to submit Forms W-2 within three years upon a request from the Department.

For more information, see EY Payroll Newsflashes Vol. 18, #204, 12-6-2017 and Vol. 20, #029, 1-31-2019.

Failure to comply with electronic filing requirement may result in penalties

Failure to electronically file Forms W-2 (and 1099/W-2G) if required may result in the assessment of penalties unless the employer requests in writing a hardship extension of the requirement to file electronically. Upon approval, the Department would extend the electronic filing requirement to the 2020 tax year.

For more information on Iowa withholding taxes, see the Department's website. 

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