Understanding IRS Form 1096

Every January, employers face the pressure of meeting tax filing deadlines, especially when managing multiple contractor payments. Amid all the 1099 forms, there’s one small document that often gets overlooked- IRS Form 1096.

Failing to include it, or filing it late or incorrectly, effectively means those underlying returns weren’t filed, which triggers substantial IRS penalties.

Penalties under IRC §6721 per information return are:

• $60 if filed within 30 days late
• $130 if filed after 30 days, but by August 1
• $330 if filed after August 1 or not filed at all
• Up to $660 per return for intentional disregard, with no maximum cap

This guide will help you understand when and how to use Form 1096, how to fill it out correctly, and how to avoid common errors that could cost your business time and money.

What Is IRS Form 1096?

IRS Form 1096, officially titled the Annual Summary and Transmittal of U.S. Information Returns, is a single-page cover sheet used when you file certain tax forms on paper with the IRS.

It summarizes the total number of forms you’re submitting (like 1099-NEC or 1099-MISC), the total amount reported, and any tax withheld. Think of it as a summary slip that tells the IRS what to expect inside your envelope.

Who Needs to File Form 1096?

Form 1096 is required only when you’re submitting certain information returns on paper. It’s not needed for electronic filing via the IRS’s FIRE or IRIS systems.

You must attach Form 1096 as a cover sheet when mailing printed ‘Copy A’ versions of any of these to the IRS:

• 1099 series (NEC, MISC, INT, etc.)
• 1098 (e.g. mortgage interest statements)
• 1097 (bond interest statements)
• 3921 / 3922 (stock option and purchase plan transfers)
• 5498 (IRA contribution statements)
• W‑2G (gambling winnings reports)

For example:

• Sending out ten 1099‑NEC forms? You’ll need one Form 1096.
• Mailing five 1099‑MISC and three 1099‑INT? This means submitting two separate Form 1096s, one for each form type.

No Form 1096 is needed if:

• You file 250 or more returns of any single type electronically (IRS e‑file threshold).
• You’re filing all returns via the FIRE or IRIS systems.

What Forms Does IRS Form 1096 Cover?

IRS Form 1096 serves as a transmittal summary for several types of information returns. You are required to submit it only when mailing paper copies of these forms to the IRS.

Commonly Covered Forms:

• 1099‑NEC – Nonemployee compensation paid to contractors
• 1099‑MISC – Miscellaneous income (rent, prizes, royalties)
• 1099‑INT – Interest income of $10 or more to individuals or unincorporated entities

Additional Covered Forms:

• 1098 – Mortgage interest statements
• 5498 – IRA contribution statements
• W‑2G – Gambling winnings reports
• 3921 – Incentive stock option exercises
• 3922 – Employee stock purchase transfers
• 1097 – Bond tax credit interest

Important: You must file one Form 1096 per form type. For example, if mailing both 1099‑NEC and 1099‑MISC, you’ll submit two separate 1096 forms.

Where to Get IRS Form 1096

You cannot print Form 1096 from the IRS website. The IRS requires that all paper-submitted 1096 forms be printed in a red scannable format. To order official copies:

• Use IRS Form 1179 to request scannable versions.
• Visit IRS.gov/orderforms or call 1-800-TAX-FORM (1-800-829-3676).
• Forms typically arrive within 7–15 business days.

Using unofficial versions may result in rejection and penalties.

How to Fill Out IRS Form 1096

Accurate completion of Form 1096 ensures your paper-submitted information returns are processed correctly. Here's a detailed step-by-step guide based on the official IRS instructions:

1. Filer Information (Top Section)

• Enter your legal name, address, and contact details exactly as shown on your information returns.

2. EIN or SSN (Box 1 or 2)

• Use Box 1 for your EIN (Employer Identification Number).
• Use Box 2 for your SSN only if you don’t have an EIN.
• You must complete only one, do not fill both.

3. Total Number of Forms (Box 3)

• Enter the number of valid forms being submitted (e.g., ten 1099-NEC forms = “10”).
• Don’t include blank, voided forms, or the Form 1096 itself

4. Federal Income Tax Withheld (Box 4)

• Enter the total federal income tax withheld as shown on your submitted forms.
• If none was withheld, enter “0”

5. Total Reported Payments (Box 5)

• Sum the payment amounts from the boxes specified for each form type:
  
  • For example, Box 1 on 1099‑NEC; Boxes 1, 3, 8 on 1099‑INT
• Do not fill Box 5 if mailing Forms 1098‑T, 1099‑A, or 1099‑G

6. Indicate Form Type (Box 6)

• Check the box that corresponds to the information return type you're summarizing (e.g., 1099‑NEC).
• Ensure only one box is checked per Form 1096

7. Nonemployee Compensation (Box 7)

• Fill this only if using 1099‑MISC to report nonemployee compensation (unlikely since 2020).
• Leave blank if filing 1099‑NEC for contractor payments.

8. Signature

• Sign, date, and include your title (or that of an authorized agent) at the bottom.
• Agents may sign on behalf of the business if authorized under an agreement.

Recordkeeping Requirements

Keep copies of Form 1096 and all attached information returns for at least four years. You may also need to submit these to state tax authorities, depending on local laws.

Where and When to File Form 1096

You must file Form 1096 in the year after the income was paid, based on the type of return you’re submitting with it. For example, if you're reporting payments made in 2024, you'll submit Form 1096 along with the required returns in 2025.

When to File

The exact due date depends on the specific form type you're mailing. Take a look at the table below to understand how it varies:

Where to File

Mail your Form 1096 and accompanying paper forms (Copy A) to the IRS location based on your principal business address:

Penalties for Late or Incorrect Filing of Form 1096

Filing IRS Form 1096 with mistakes or missing the deadline can lead to substantial penalties. While Form 1096 itself isn't fined separately, penalties apply to the individual information returns it summarizes, such as 1099s or 1098s.

1. Penalty Structure Based on Filing Date

The IRS applies penalties per form depending on how late the submission is:

These penalties apply to each information return (e.g., each 1099-NEC), not to Form 1096 itself. So, if you file 15 incorrect or late 1099s, penalties are calculated for all 15.

2. Additional Penalties for Improper Forms

The following issues may also result in fines:

• Using unofficial forms: Downloaded or photocopied versions of red-ink “Copy A” are not accepted and may result in rejection or penalties.
• Incorrect or missing data: Errors in recipient names, taxpayer identification numbers (TINs), or dollar amounts may also be penalized under late or incorrect return rules.

3. Key Employer Takeaways

• Penalties scale quickly with volume. Ten incorrect 1099s could mean $1,300 to $6,600, depending on how late they are filed.
• Using the official red-ink IRS form is essential. Scanned or printed copies from the IRS website are for reference only.
• File as early as possible to reduce the risk of late penalties.
• Maintain accurate records to minimize the risk of incorrect submissions.
• If you discover an error, submit a correction with a new Form 1096 as soon as possible.

How to Make Corrections to Form 1096 and Attached Returns

If you've filed incorrect Form 1096 or its attached returns, corrections must follow IRS protocols based on error type.

1. Fixing Errors on 1099s or Other Returns

For wrong amounts, codes, or checkboxes (Type 1 errors):

• File a corrected return with the “CORRECTED” box checked.
• Submit a new Form 1096 summarizing only these corrected returns.

For incorrect TINs or names (Type 2 errors):

• Step 1: File a corrected return with zeroed-out values and check “CORRECTED.”
• Step 2: File a new return with correct info (leave “CORRECTED” unchecked) and submit with a new 1096 marked “Filed to correct TIN” or similar note.

2. Fixing Errors on Form 1096

You can’t directly “correct” Form 1096.
Instead:

• Complete a new, accurate 1096.
• Submit it with the correct Copy A forms.
• Do not check any “CORRECTED” box; write “Filed to correct return” in the margin.

Key Rules

• Always use official red-ink forms.
• Never mark “CORRECTED” on Form 1096.
• Keep records for at least four years.

Final Thoughts

Filing IRS Form 1096 correctly is essential to avoid costly penalties, rejected returns, and delays in year-end reporting. From understanding which returns require a 1096 to completing and mailing the correct forms, every step matters.

If you’re managing multiple contractors or paper filings in-house, the process can become overwhelming, especially during tax season.

Wisemonk’s Employer of Record (EOR) services help streamline your 1099 and 1096 filings by managing payroll, contractor classifications, and IRS reporting on your behalf. Our team ensures your filings are accurate, compliant, and on time, so you can focus on running your business, not chasing tax forms.

Ready to eliminate compliance errors and simplify year-end filings? Contact Wisemonk today to get expert support for your payroll and IRS reporting needs.

FAQs

Q: What is IRS Form 1096 used for?
A: Form 1096 is used to summarize and transmit certain paper-filed tax forms, like 1099s, to the IRS. It provides a summary of the total number of forms and amounts reported.

Q: Who needs to file Form 1096?
A: You need to file Form 1096 when submitting paper versions of certain forms (e.g., 1099-NEC, 1099-MISC) to the IRS. It’s not required for electronic filings.

Q: What happens if I file Form 1096 late or incorrectly?
A: Penalties for late or incorrect filings can range from $60 to $330 per form, depending on how late the submission is, with higher fines for intentional disregard.

Q: How do I correct a mistake on Form 1096?
A: If you make an error, file a corrected Form 1096 with accurate information and submit it along with corrected 1099 forms. Be sure to mark "CORRECTED" on the information returns.

Q: When is the deadline to file Form 1096?
A: Form 1096 must be filed by February 28 (or the next business day) for most forms, and the IRS recommends mailing it early to avoid penalties.