Summary: Form 1096 is an information return which businesses may need to submit to the IRS covering a range of matters, including independent contractor payments.
Doing your taxes as an employer can be complicated, as any business owner can attest. Not only do you have to get your numbers to add up, but there are also numerous forms to fill out, especially if you’re filing on paper. The Internal Revenue Service (IRS) has over 800 forms and schedules, and that doesn’t even include state and local tax forms. We want to make tax time easier for employers and that’s why we’ve put together this quick explanation of Form 1096 and how to fill it out and file it like a professional.
What Is Form 1096?
The IRS has so many forms with long names that it learned long ago to refer to them by number instead. However, unless you’re an experienced business owner or a tax accountant, these numbers don’t help a lot. The full name of Form 1096 is the Annual Summary and Transmittal of U.S. Information Returns which gives a lot more information than just its number. Here’s what this name means.
Form 1096 is a tax form used to summarize information returns for the IRS.
This form is largely used by business owners, but also by other individuals who need to report various types of income or expenditures. They must use Form 1096 to transmit paper versions of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G to the IRS. These forms are all considered information returns since they are documents that provide the IRS with information but not tax payments. When filing any of these types of forms, a separate 1096 form needs to be included with each batch of forms as a cover sheet. Form 1096 is only used when filing on paper and should not be filled out by business owners who are filing their tax returns electronically.
For employers, Form 1096 is most relevant when reporting payments to independent contractors and other non-employees. These amounts are reported on various 1099 forms, and contractors are therefore known as 1099 workers.
What Information Is on Form 1096?
Form 1096 is, thankfully, a short form with only six main boxes. Above these boxes are fields for the person filing the form to fill out, including:
- Filer’s name and full address
- Name of contact person
- Telephone number
- Email address
- Fax number
After this, the official Boxes 1-6 require the following information:
- Box 1 – Employer Identification Number (EIN)
- Box 2 – Social Security Number
- Box 3 – Total number of forms submitted
- Box 4 – Federal income tax withheld (dollar amount)
- Box 5 – Total amount reported with the Form 1096 (dollar amount)
- Box 6 – Type of form submitted
Box 6 instructs the filler to tick one of the 35 different boxes available to indicate the type of form being sent. Each type of form should be accompanied by its own Form 1096, including variants of these forms (1099-A, 1099-B, 1099-C, etc.). The different forms that need to be accompanied by a Form 1096 include:
| Form Number | Form Name | Used to Report |
|---|---|---|
| W-2G | Certain Gambling Winnings | Gambling winnings and taxes withheld |
| 1097‑BTC | Bond Tax Credit | Tax credits distributed by bond issuers or agents |
| 1098 | Mortgage Interest Statement | Mortgage interest received |
| 1098‑C | Contributions of Motor Vehicles, Boats, and Airplanes | Gifts of vehicles, boats, and airplanes received |
| 1098‑E | Student Loan Interest Statement | Student loan interest received |
| 1098‑F | Fines, Penalties, and Other Amounts | Fines and penalties paid due to legal violations or investigations |
| 1098‑Q | Qualifying Longevity Annuity Contract Information | Qualifying longevity annuity contracts (QLAC) issued |
| 1098‑T | Tuition Statement | Tuition, scholarships, or grants paid |
| 1099‑A | Acquisition or Abandonment of Secured Property | Acquisition or abandonment of property as security for a debt |
| 1099‑B | Proceeds From Broker and Barter Exchange Transactions | Sales or redemptions of securities or futures and barter transactions |
| 1099‑C | Cancellation of Debt | Debts greater than $600 you canceled for your debtors |
| 1099‑CAP | Changes in Corporate Control and Capital Structure | Cash, stock, or other assets received due to an acquisition or capital structure change |
| 1099‑DA | Digital Asset Proceeds from Broker Transactions | Proceeds from digital asset transactions |
| 1099‑DIV | Dividends and Distributions | Dividends and capital gains distributions |
| 1099‑G | Certain Government Payments | Unemployment compensation, grants, and income tax refunds, credits, or offsets |
| 1099‑INT | Interest Income | Income from interest collected |
| 1099‑K | Payment Card and Third Party Network Transactions | Payment card transactions and third‑party network payments |
| 1099‑LS | Reportable Life Insurance Sale | Interest in life insurance policies |
| 1099‑LTC | Long‑Term Care and Accelerated Death Benefits | Long‑term care and accelerated death benefits paid from life insurance contracts |
| 1099‑MISC | Miscellaneous Information | Rents, prizes, awards, medical and health care payments, royalties, legal fees, etc. |
| 1099‑NEC | Nonemployee Compensation | Payments to contractors and other non‑employees |
| 1099‑OID | Original Issue Discount | Income from bonds, notes, or CDs sold for less than maturity value |
| 1099‑PATR | Taxable Distributions Received From Cooperatives | Patronage dividends and distributions from cooperatives |
| 1099‑Q | Payments from Qualified Education Programs (Sections 529 & 530) | Payments for qualified tuition programs and Coverdell ESAs |
| 1099‑QA | Distributions from ABLE Accounts | Withdrawals from ABLE (Achieving a Better Life Experience) savings accounts |
| 1099‑R | Distributions from Pensions, Annuities, Retirement or Profit‑Sharing Plans, IRAs, Insurance Contracts, etc. | Distributions from retirement plans, IRAs, and insurance contracts |
| 1099‑S | Proceeds from Real Estate Transactions | Proceeds from sale/exchange of real estate or timber royalties |
| 1099‑SA | Distributions from an HSA, Archer MSA, or Medicare Advantage MSA | Distributions from HSA, Archer MSA, or Medicare Advantage MSA |
| 1099‑SB | Seller’s Investment in Life Insurance Contract | Sales or transfers of life insurance contracts |
| 3921 | Exercise of an Incentive Stock Option (Section 422(b)) | Transfers of employer stock to employees |
| 3922 | Transfer of Stock Acquired Through an Employee Stock Purchase Plan (Section 423(c)) | Transfers of employer stock via ESPP |
| 5498 | IRA Contribution Information | Contributions to individual retirement plans |
| 5498‑ESA | Coverdell ESA Contribution Information | Coverdell ESA contributions or rollovers |
| 5498‑QA | ABLE Account Contribution Information | Contributions/rollovers to ABLE savings accounts |
| 5498‑SA | HSA, Archer MSA, or Medicare Advantage MSA Information | Contributions to HSA, Archer MSA, or Medicare Advantage MSA |
How and Where Do You File Form 1096?
Only those people and businesses filing on paper (physically) need to use 1096 forms. If you file electronically, you don’t need to use these forms at all.
There are restrictions to using the paper 1096 forms that you should be aware of, however. These include the following rules:
- A different 1096 form is needed for each type of form it accompanies (W-2G, 1099, etc)
- If 10 or more information returns are being filed for the year, you must file electronically and therefore don’t need to use a Form 1096.
- While information return forms are sent to recipients, Form 1096 is only sent to the IRS.
- Form 1096 cannot be downloaded and printed but must be ordered from the IRS.
This form can be filled out by hand or printed on, which is more effective and easier for processing. There are three IRS locations – in Austin Texas, Kansas City Missouri, and Odgen Utah – where you need to file your information returns and 1096 forms, depending on the state where your residence or principal place of business is located.
The deadline to file your Form 1096s depends on the deadline for the information returns they accompany. The various information return forms listed above have due dates that include:
January 31 (ex. 1099-NEC), February 15 (ex. 1099-DA), February 28 (ex. 1099-CAP), March 15 (ex. 1042-S), and May 31 (ex. 5498-ESA).
Example of How to File Form 1096
Let’s consider an example filer, Employer A. Over the year, Employer A hired four different contractors to do different work, Contractor W, Contractor X, Contractor Y, and Contractor Z. Each of Contractors W, X, and Y received over $600 from Employer A while Contractor Z only received $400. In this case, Employer A has to file only three 1099-NEC forms and send copies to Contractors X, Y, and Z. Contractor Z doesn’t require one.
In this case, Employer A also needs to file these three 1099-NEC forms with the IRS and needs a single Form 1096 to do so. On that form, Employer A should tick the box for Form 1099-NEC in Box 6. In Box 3, they should write the number “3” because they are submitting three 1099 forms. In Box 5, they should report the total of the payments they made to these three contractors, and report any federal income tax withheld on these payments (zero for contractors). Employer A should then file the three 1099-NEC forms plus the one 1096 form with the IRS no later than January 31 of the next year.
Form 1096 Summarized
Form 1096 is like a cover letter. It’s used when filing on paper, and one 1096 should accompany each type of information return sent to the IRS. Form 1096 tells the IRS how many information return forms are being sent, their type, and the total reported amount they represent. Filling this form out correctly is easy, but it’s also instrumental in filing your return correctly.