With 2026 year-end on the horizon, now is the time to organize your payroll and tax reporting. Getting ahead of the process helps you avoid last-minute stress and ensures your business stays compliant when filing W-2 and 1099 forms for tax year 2026.
Use this three-step checklist to cover the essentials for year-end reporting. You'll be ready to e-file with confidence and start the new year strong.
1: Set internal business processes
Start by defining your internal year-end processes. Align your team and tools now to prevent confusion down the road. Ask your year-end team these key questions:
How will you complete your W-2 and 1099 forms?
Decide how you'll process your forms. You can complete them manually, use your accounting software, rely on dedicated tax prep software, or use pre-printed W-2 forms. Choose the method that fits your business best.
How will you distribute your W-2 and 1099 forms?
Each form requires copies for the IRS, SSA, and your workers. Decide how you'll deliver forms to each party to keep distribution efficient.
Since 2024, most businesses have been required to electronically file year-end forms.
- If you're submitting 10 or more total information returns (W-2s, 1099s, and similar forms combined), you must e-file through approved systems such as the SSA's Business Services Online (BSO) or the IRS Information Returns Intake System (IRIS). The 10-return count adds together W-2s and most other information returns and does not apply separately to each form type.
- Even if you have fewer than 10 forms, e-filing is still the fastest and most reliable choice. The SSA encourages all employers to e-file.
Distribute forms to employees based on their preferences. By default, employees must receive a paper copy. However, if your company uses a self-service portal and has provided the option for employees to receive their forms electronically, you may do so with the employee's explicit permission. IRS Publication 15-A sets out the consent and disclosure requirements for furnishing Form W-2 electronically.
What are the due dates for each form?
Each form type has its own deadline. Make sure your team knows each due date to stay on track with distribution.
W-2 deadlines
- February 1, 2027: Form W-2 and Form W-3 must be filed with the SSA (Social Security Administration), and W-2 copies must be furnished to each employee. January 31 falls on a Sunday, so the IRS instructions for Forms W-2 and W-3 set February 1, 2027 as the due date for both, whether you file on paper or electronically.
1099 deadlines
- February 1, 2027: Form 1099-NEC is due to both the IRS and the recipient, on paper or electronically. Generally speaking, other 1099 forms are due to the recipient on this date as well.
- Other 1099s may have individual deadlines that you can confirm in IRS Publication 1099.
- March 31, 2027: Copies of most other 1099s must be sent to the IRS electronically. See the IRS instructions for Forms 1099-MISC and 1099-NEC.
Stay ahead of every deadline
Your 2027 compliance calendar
A month-by-month guide with all key federal payroll and tax deadlines, holidays, and monthly tips.
Bookmark Your Copy →2: Prepare data for form completion
Accurate data is the backbone of a smooth year-end. Taking time to confirm worker details and payment information upfront saves time (and potential correction headaches) later.
Ensure you have correctly classified workers
Before you distribute or file forms, ensure your workers are properly classified. Proper classification is essential to comply with tax and labor laws. The IRS has a comprehensive guide on how to do this correctly.
Confirm you have proper documentation
Gather all required information from employees and independent contractors to complete W-2 and 1099 forms accurately.
- For employees: Keep a W-4 form on file for each person. This form includes their personal details and federal tax withholding information.
- For independent contractors: Make sure you have a current W-9 form with their contact and taxpayer ID information. Collect all payment records from their contract period.
OBBBA changes to W-2s and 1099s for tax year 2026
The One Big Beautiful Bill Act (P.L. 119-21) changed what employers and payers report on W-2s and 1099s, starting with tax year 2026. Workers claim the new deductions on their own tax returns. Employers and payers report the amounts.
- Tips. Workers can deduct up to $25,000 for tax years beginning after 2024 and ending before 2029. Qualified tips are voluntary cash or charged tips, including tips received through tip-sharing. Mandatory service charges don't count. Tips must be received in an occupation on the IRS list.
- Occupation codes. The IRS final regulations list more than 70 occupations in eight categories. Codes are on IRS.gov/TTOC. For a plain-language walkthrough, see our guide to the final qualifying occupation list.
- Overtime. Workers can deduct up to $12,500 ($25,000 if married filing jointly) of qualified overtime for the same tax years. Only the premium above the regular rate that the Fair Labor Standards Act (FLSA) requires qualifies.
- Payroll taxes don't change. Tips and overtime are generally still subject to federal income tax withholding, Social Security tax, and Medicare tax.
Changes to Form W-2
| Box | What changed |
|---|---|
| Box 12, code TP | Total cash tips reported to the employer. You must also list an occupation code in box 14b. |
| Box 12, code TT | Total qualified overtime compensation: the amount above the regular rate that the FLSA requires, such as the "half" in time-and-a-half. |
| Box 12, code TA | Employer contributions to the Trump account of an employee or an employee's dependent, paid under a section 128 Trump account contribution program. |
| Box 14a | "Other," the same use as the old box 14. |
| Box 14b | Treasury Tipped Occupation Code(s). Enter up to two codes. Required when box 12 code TP reports cash tips. |
- Trump account contributions. Beginning July 4, 2026, employers may contribute up to $2,500 a year, indexed for inflation after tax year 2027, to the Trump account of an employee or an employee's dependent. The amount is excluded from the employee's gross income if paid under a section 128 program. Learn more about Trump account contributions here.
- Territory W-2s. For Forms W-2AS, W-2CM, W-2GU, and W-2VI, check with the territory on whether codes TP, TT, and TA apply. The IRS W-2 instructions do not cover Puerto Rico.
Changes to Forms 1099-NEC and 1099-MISC
| Form | Reporting threshold | New or changed boxes |
|---|---|---|
| 1099-NEC | $2,000 in box 1a, up from $600. |
Box 1 is now box 1a, nonemployee compensation. New boxes:
The amounts in 1b and 1d are included in box 1a. |
| 1099-MISC |
$2,000, up from $600, for rents, prizes and other income, medical and health care payments, crop insurance, and section 409A deferrals and nonqualified deferred compensation. Royalties and substitute payments stay at $10, and attorney gross proceeds and fish purchases stay at $600. |
New boxes:
The amounts in 13a and 14 are included in box 3. |
If you backup withhold, you report the payment on a 1099 regardless of the amount.
Gather essential payroll information
Double-check that your company and worker data is complete and accurate. Make sure your team has the following information ready.
Employer information
- Employer ID number (EIN)
- Business name, address, and zip code
- State tax ID number for the business
Employee and contractor information
- Full name, address, and Social Security Number (SSN) or Taxpayer Identification Number (TIN)
- Total amount paid to the employee/contractor, including wages, tips, and other compensation
- Amount of federal income tax withheld
- Social Security wages (the 2026 wage base is $184,500, per the SSA's 2026 fact sheet)
- Medicare wages
- Cash tips reported to you and the employee's Treasury Tipped Occupation Code(s)
- Qualified overtime premium paid
- Benefits provided
- State-specific information, such as wages and tips paid and whether state income tax was withheld
- Local wages, tips, and local income tax information
E-file accuracy tip: Verify names and taxpayer ID numbers before you file. Employers can verify employee SSNs through the SSA's employer services, and payers can check name and TIN combinations on 1099s through the IRS TIN Matching program. The IRS anticipates that payers who validate before filing will receive fewer backup withholding (CP2100) notices and penalty notices.
3: File forms 1099 and W-2
Once your data is ready, file your forms. E-filing gets your forms delivered faster, processed accurately, and provides digital confirmation for your records.
Where to e-file
- W-2 forms: File through the SSA Business Services Online (BSO) portal.
- 1099 forms: File using the IRS Information Returns Intake System (IRIS).
IRIS will be the only IRS system for e-filing information returns after January 1, 2027, including current-year returns, prior-year returns, and corrections. The IRS is retiring its FIRE system, and the last day to submit returns through FIRE is November 19, 2026. Filers need an IRIS Transmitter Control Code (TCC), and the IRS says a typical TCC application takes up to 45 business days to process.
With Greenshades, these steps are automated. The platform generates your forms, e-files with the SSA and IRS, and provides confirmation receipts and validation checks to help prevent errors before you submit.
Distribute and save copies
- Provide recipients with their copies (paper or electronic).
- Keep a copy of Form W-3 and Copy A of each Form W-2 for at least 4 years, per the IRS instructions for Forms W-2 and W-3.
- Keep copies of the 1099s you file, or the ability to reconstruct the data, for at least 3 years from the due date. The retention period is 4 years if federal withholding, including backup withholding, was imposed, per Publication 1099.
- Save your electronic filing confirmations with those records. They protect your business in case of audit or corrections.
Reminder: Don't forget to review any state-specific reporting rules. Some states require separate filings or additional year-end forms. The IRS directs filers to contact their state and local tax departments for those requirements (Publication 1099, part D).
Simplify 2026 year-end filing with Greenshades
From data validation to automatic e-filing, Greenshades streamlines every step of the W-2 and 1099 process, with no spreadsheets or manual uploads required.
✅ Automated form generation and e-filing
✅ Built-in compliance checks
✅ Secure employee self-service portal
✅ Comprehensive year-end resources
Note: This information is for informational purposes only and does not constitute formal tax, legal, or compliance advice. Always consult with qualified tax advisors, legal counsel, and your organization's internal teams for guidance specific to your situation. Additional regulations may apply. For the most accurate and up-to-date information, refer to official government resources and regulatory agencies.
