Form 1096: a guide for US employers

Are you working with independent contractors that are subject to US taxes? If so, you may be familiar with Form 1099.

However, you might not be aware of Form 1096.

In this quick guide, we'll explain the purpose of Form 1096, and which businesses need to file it. We'll also answer several other key questions, including:

• How do you complete Form 1096?

• What’s the deadline for filing Form 1096?

• What happens if you don’t submit Form 1096?

• Why is a global HR partner the safest way to manage tax filing for your global contractors?

So let's jump right in.

What is Form 1096?

Form 1096 is the Annual Summary and Transmittal of US Information Returns, issued by the Internal Revenue Service (IRS). Like Form 1099, it serves as a summary page for different IRS tax forms.

You don't need to submit Form 1096 if you're filing electronically. You also don't need to send 1096s to your contractors.

For example, say your business hires a US-based contractor to create a website. You would need to issue them with a Form 1099, and send a copy of that 1099 to the IRS. If you were filing by mail, you'd also need to send Form 1096.

Keep in mind that it’s not necessary to file Form 1099 or 1096 for contractors that aren’t subject to US taxes. But for contractors who are — including US contractors living abroad — 1099 (and, if relevant, 1096) is mandatory.

To get Form 1096, you can either place your order through the IRS website or by calling 1-800-829-3676. You can expect to receive the form within 10 days.

Who needs to file Form 1096?

As the business hiring the contractor, it is your responsibility to submit the 1096 form. Contractors do not need Form 1096 when submitting their taxes.

Do I need Form 1096 if I’m e-filing?

No. There’s no need to submit Form 1096 if you’re filing everything electronically. Form 1096 is only required if you’re submitting your documentation by mail.

How to complete Form 1096

Form 1096 is fairly straightforward to fill out. Here’s how to do it:

Step 1: Fill in your business information

The first step in completing Form 1096 is to fill in all of your business information, including your company name, address, and the number of returns your business needs to file.

Step 2: Fill in your personal details

Next, fill in your personal information, including the following:

• Full name

• Phone number

• Email address

• Fax number

• Home address

• City

• State

• Country

• Zip code

There’s also a box for adding the contact details of your company’s accountant.

Step 3: Enter your EIN in Box 1

If you have one, include your Employer Identification Number (EIN) in Box 1. If you don’t have an EIN, include your Social Security number in Box 2 instead.

Step 4: Enter the number of forms in Box 3

Specify the number of forms you plan to submit to the IRS. For example, if you’re planning to file five 1099-MISC forms, write down “5” in Box 3.

Step 5: Calculate your withheld federal income tax in Box 4

Calculate the combined withheld federal income tax from all the forms you’re filing, and record this total in Box 4.

Step 6: Indicate which return you’re submitting in Box 6

One of the last steps in completing Form 1096 is to indicate which return you’ll be filing in Box 6. Use an X to mark the information return that you're submitting to the IRS.

Here are some of the forms that require an accompanying Form 1096 (if you’re filing by mail):

• Forms W-2G

• Form 1098

• Form 1098-C

• Form 1098-E

• Form 1099-B

• Form 1099-C

• Form 1099-CAP

Step 7: File Form 1096 with the IRS

Finally, file the form with the IRS using the address provided. Make sure that all the information you entered is correct before filing, and make copies for your business records.

What’s the deadline for filing Form 1096?

Companies must file Form 1096 (and all accompanying forms) by the February 28 that follows each tax year. However, if you’re liable to file the 1099-MISC form, then you’ll need to file it — along with Form 1096 — by January 31.

What happens if you don’t submit Form 1096?

If you file by mail and don’t file Form 1096, you will need to pay a late filing penalty of $50 per form. If, after 30 days, you still haven't filed, this increases to $110 per form. After August 1, the penalty is $260 per form.

In the case of intentional failure to file, the penalty is $350 per form.

How to simplify tax filing for your contractors

Tax filing can be messy and complex at the best of times, but if you have multiple contractors working remotely in different locations, it can be easy to make a potentially costly mistake.

Our Contractor Management platform simplifies everything. It enables you to onboard, manage, and pay your contractors in one place — and we can help you fill out Form 1099 for your US contractors, too. We can also help you:

Create and edit locally-compliant contractor agreements

Receive and pay invoices in one click

Make payments in over 70 currencies in 180+ countries

To see how Contractor Management can make your life easier, take a quick tour now — or sign up for a free 30-day trial.

Always stay compliant (whether at home or abroad)

Taxes are complicated, whether you're working with US-based or international contractors.

Understanding the Form 1096 requirements is important if you are a US-based company collaborating with contractors and filing by mail. The information in this guide will help you file the right forms on time, and ensure you avoid costly penalties.

Have more questions about managing your contractors? Reach out and let us know! We are always happy to help you grow your global team.