Payroll

Missed the 1099 Deadline? Here’s What to Do

Written & reviewed by Ram Singh, founder, Numerawise Solutions · Last reviewed August 31, 2026

File it now — but the “file fast and save money” advice only works inside a window that has usually already closed. Here is what still moves the number, and the 24% exposure that is often bigger than the penalty itself.

Short answer: file the return now, file the recipient copy too, and chase the missing W-9 before you do either. But be realistic about why you are filing. The per-form penalty is set by when the return actually reaches the IRS, and it stops improving after 1 August of the year the form was due. For a 1099 that was due in early 2026, that window has already closed. What still moves the number today is reasonable cause, keeping the failure from being treated as intentional disregard, and whether you should have been withholding 24% from the contractor all along.

Before you file, check the current dates and dollar amounts in our companion guide to 1099 deadlines, rules and penalties. It carries the tax-year 2026 schedule and the $2,000 threshold that replaced $600.

What a late 1099 actually costs in 2026

Two separate penalties apply to the same form. Internal Revenue Code §6721 covers the copy that goes to the IRS. Section §6722 covers the payee statement that goes to your contractor. The IRS charges them separately, for each return and each statement — so one unfiled, unfurnished 1099 costs double what most articles quote.

For information returns due in 2026:

How late	IRS copy (§6721)	Payee copy (§6722)	Total per form
Up to 30 days late	$60	$60	$120
31 days late through 1 Aug	$130	$130	$260
After 1 Aug, or not filed	$340	$340	$680
Intentional disregard	$680	$680	$1,360

Maximum annual penalties exist and are lower for small businesses, but for a company filing a handful of 1099s the cap never binds — the per-form figure is simply what you pay. There is no maximum at all for intentional disregard.

Where you actually are on the clock

Check the calendar before you decide how fast to move. Tax-year 2025 forms were due 2 February 2026 for 1099-NEC (31 January 2026 fell on a Saturday), and 2 March 2026 for paper 1099-MISC. Anyone dealing with those forms in the second half of 2026 is already past 1 August, which means they are already in the $340-per-copy tier. Filing this week rather than next month will not change the tier.

That is not an argument for waiting. It is an argument for changing what you are optimizing. Once the tier is fixed, the two things that still move money are reasonable cause and the gap between “late” and “never filed.” A return you never file at all is precisely the fact pattern the IRS uses to argue intentional disregard — double again, and uncapped.

Do not file Form 8809. It cannot help you now

Requesting an extension after the fact is the most common wrong move, and it fails for two independent reasons.

First, the automatic 30-day extension is only acknowledged if the request is made by the due date of the return. Once that date has passed there is nothing left to extend. Second, for Form 1099-NEC there is no automatic extension even when you are on time. It requires a paper Form 8809 and you must meet one of the conditions printed on the form — catastrophe or extraordinary circumstances, such as a fire that destroyed the records you needed. Being short-staffed does not qualify.

Extensions for the recipient copies are a separate request entirely, made by fax, and also have to be timely.

The recovery sequence

1. Rebuild the list. Pull every non-employee payment for the year and total it by payee. This is where a clean ledger pays for itself; if the books are behind, fix that first.
2. Chase the missing W-9s. Do this before filing, not after — see the next section for why it is the most expensive step to skip.
3. Furnish the recipient copies first. The §6722 penalty is separate and equal in size, and your contractor may be waiting on the form to file their own return.
4. File the IRS copies. If you have 10 or more information returns counted in aggregate across all form types — including W-2s — electronic filing is mandatory. Note the channel change: the legacy FIRE system is being retired, with IRIS becoming the route for 1099-series filing.
5. Write the reasonable-cause memo now, while the facts are fresh and the dates are provable.

The 24% that is bigger than the penalty

If you paid someone who never gave you a correct taxpayer identification number, the late 1099 is not your real problem. Under the backup withholding rules you were required to withhold 24% of those payments, and the IRS is explicit that the payer is responsible for the amount they failed to withhold. That liability is not capped at $680. On $40,000 of contractor payments it is $9,600, owed by you, reported on Form 945.

It compounds from there. When a late return goes in with a missing or mismatched TIN, the IRS issues a CP2100 or CP2100A notice. You then have to send the payee a “B” notice, and if they do not respond you must begin backup withholding on future payments no later than 30 business days after you received the notice.

This is why filing late with whatever name you happen to have on file is the worst version of filing late. Get the W-9.

Reasonable cause: what it actually requires

Reasonable cause is not a form and not a checkbox. Under Treasury Regulation §301.6724-1 the IRS applies a two-part test, and both halves must hold: you acted in a responsible manner both before and after the failure, and either there were significant mitigating factors or the failure arose from events beyond your control.

“Beyond your control” means something like destroyed records, or a payee who supplied an incorrect TIN despite your documented request. It does not mean the season got busy or the bookkeeper resigned. The useful half is the second one: acting responsibly afterwards is something you can still create today, by requesting the missing W-9s in writing, filing as soon as the obstacle clears, and keeping the paper trail that shows both.

Timing matters. If the IRS sends Notice 972CG, you have 45 days to respond — 60 if you are a foreign filer — before the penalty is assessed. Responding inside that window is a materially stronger position than arguing for abatement afterwards.

One myth worth killing: First Time Abate does not rescue you here. That administrative waiver covers failure-to-file, failure-to-pay and failure-to-deposit penalties. The IRS's own information-return penalty guidance offers exactly one route to removal or reduction — reasonable cause.

Making next January uneventful

• Collect the W-9 before the first payment clears, not at year end. This single habit removes the backup withholding exposure entirely.
• Note the new threshold. For payments made after 31 December 2025 the reporting threshold is $2,000, not $600, and it is inflation-indexed after 2026.
• Mark the real date. 31 January 2027 falls on a Sunday, so the 1099-NEC deadline moves to Monday 1 February 2027.
• Count in aggregate. Ten information returns across all types combined — not ten of one kind — triggers mandatory e-filing.

If the underlying issue is that your contractor payments were never cleanly separated in the ledger, that is a bookkeeping problem wearing a compliance costume. Our payroll and compliance and bookkeeping services exist to stop the January scramble from happening in the first place.

Penalty amounts, thresholds and filing channels change annually. Figures above reflect IRS guidance for information returns due in 2026 and were verified against IRS primary sources on 31 August 2026. This is general information, not tax advice for your specific situation.