What is a 1096 Form

What is a 1096 Form?

A 1096 Form is the IRS cover sheet that US-based businesses need to file when mailing in certain paper information returns, like 1099s, 1098s, and 5498s. Officially titled the “Annual Summary and Transmittal of U.S. Information Returns,” Form 1096 is required if you submit these forms to the IRS by mail rather than electronically.

Not every business will need to file a 1096 Form, but if you’re handling contractor payments, mainly a mix of domestic and international, you should know when it’s required, how to file it, and how platforms like Payoneer Workforce Management can assist you with streamlining the process. 

Here’s a quick breakdown that we’ll elaborate on further in this article.

You MUST file Form 1096 if…	You DO NOT need to file Form 1096 if…
You’re mailing 1099 forms to the IRS (not e-filing)	You’re submitting 1099 forms electronically
You’re sending any paper information return (e.g., 1098)	You’re using the IRS FIRE system or an e-file provider
You’re filing fewer than 250 returns (paper allowed)	You file all forms through an Agent of Record/ Contractor Management System or another e-filer

Who needs to file a 1096 Form?

Instances in which a 1096 needs to be filed include:

#	Category
1	Businesses filing paper copies of 1099, 1098, 5498, or W-2G forms with the IRS.
2	Organizations submitting fewer than 250 information returns of the same type (electronic filing is required at or above this threshold unless a waiver is granted).
3	Employers issuing Form W-2G for gambling winnings by mail.
4	Financial institutions filing Form 1098 for mortgage interest via paper.
5	IRA custodians or trustees submitting Form 5498 on paper.
6	Payers of interest, dividends, or miscellaneous income using paper 1099 forms.
7	Any filer not using the IRS FIRE (Filing Information Returns Electronically) system or an authorized e-file provider.

On the other hand, there are a handful of categories where a Form 1096 is unnecessary. These include: 

Group	Correct Form
Businesses filing information returns electronically	FIRE system
Employers filing employee wage forms (W-2)	Form W3
Foreign payers not required to submit US info returns	Form 1042S
Tax-exempt organizations filing annual information returns	Form 990
U.S. persons submitting tax identification info	Form W9

When is IRS Form 1096 due?

There are two critical due dates to keep in mind regarding Form 1096. They are as follows:

1. To IRS: If you’re mailing paper 1099 forms, your Form 1096 is due by January 31 of the year following the tax year being reported. For other paper forms like 1099-MISC, 1098, or 5498, Form 1096 is due by February 28.
2. To Contractors: Copy B of the 1099 must be provided to contractors by January 31 of the year following the tax year being reported, regardless of whether you file with the IRS electronically or by mail.

Common mistakes to avoid with Form 1096

As with any tax form, filing errors can lead to delays, penalties, or compliance issues. Here are some of the most common mistakes to avoid, and why getting it right matters.

Mistake	Why it matters
Filing Form 1096 for e-filed forms	IRS doesn’t require (or want) 1096 with electronic submissions
Forgetting to send a separate 1096 per form type	You must send a unique Form 1096 for each form series you paper file
Missing deadlines	Late filings may incur penalties, even if the 1099s themselves were accurate
Not verifying totals in Box 3 and Box 7	Double-check the number of forms and total amounts before submitting

What if I work with foreign contractors?

If your workforce includes freelancers or contractors who live outside the US, you typically won’t issue a 1099-NEC and, by extension, will not need to file a Form 1096. 

Instead:

• You should collect Form W-8BEN (for individuals) or Form W-8BEN-E (for entities).
• These forms help establish the contractor’s foreign status and determine tax withholding obligations.

If you need help managing your contractors, a powerful contractor management system like Payoneer Workforce Management can be a huge boon to your business and its operations.

How Payoneer Workforce Management simplifies contractor management

Knowing what Form 1096 is is critical for any operation utilizing contractors. However, managing contractors, especially when you’re juggling both domestic and international ones, requires significant effort. It’s confusing, tedious, and, let’s be honest, easy to mess up. 

That’s why Payoneer Workforce Management exists: to assist and offer guidance at every step so that everything’s handled cleanly, so that you stay compliant and minimize the usual chaos.

• Get classification right from the start with our EOR and AOR services.
• Stay compliant while engaging talent in 160+ countries while reducing the legal headaches.

With Payoneer Workforce Management, you can simplify contractor onboarding, handle global payments with ease, and stay informed about tax compliance. It’s a powerful, all-in-one solution that takes care of the grunt work, so you can scale faster without getting buried come tax season.

If you’re ready to take charge of your workforce, reach out today for a free demo.