The IRS requires businesses to electronically file (e-file) tax forms if they are filing 10 or more forms. IRS regulations reduce the 250-return threshold to generally require electronic filing by filers of 10 or more returns in a calendar year beginning in 2024, tax year 2023. For tax year 2022, the number of returns remains at 250.

E-filing offers several benefits, including faster processing, reduced chances of errors, and acknowledgement of receipt from the IRS. However, whether you are required to e-file tax forms depends on the number of forms you are filing and certain other factors. Here are the guidelines:

Mandatory E-filing

  • If you are filing 10 or more forms, you must e-file with the IRS. This threshold applies across all types of 1099 forms combined (e.g., Forms 1099-NEC, 1099-MISC, etc.).

Below the Threshold

  • If you are filing fewer than 10 forms, you can choose to e-file or paper file. Many businesses prefer e-filing due to its convenience, speed, and accuracy. Electronic submissions also provide faster confirmation of receipt by the IRS.

Waiver from Electronic Filing

  • If you cannot meet the electronic filing requirement, you can request a waiver by submitting Form 8508, Request for Waiver from Filing Information Returns Electronically.

State Requirements

  • If you also need to file forms with a state, you should check the state’s requirements. Some states may have mandatory e-filing requirements, different thresholds, or other specifications.

Form 1096

  • If you are e-filing 1099 forms, you generally don’t need to submit a Form 1096, which is a summary transmittal form that accompanies paper filings. The e-filing software or service will automatically generate the required summary information for the IRS.