The IRS requires you to deliver 1099 forms to your vendors by January 31st. You may not realize this, but that form is required to be on a physically printed piece of paper. Unless your vendor gives you specific consent otherwise. That requirement doesn’t make a whole lot of sense in our cloud-based digital age. But, it’s the law of the land.
The problem is that we’re increasingly seeing companies (and even accountants) emailing PDFs around as a way to deliver 1099s. It’s not compliant. It’s not terribly secure. And, we’re here to show you that there’s a better way.
Electronic Consent for 1099 Delivery
To make sure you’re acting in a compliant manner for “electronic recipient statements,” here are the steps you need to take (from IRS General Instructions for Certain Information Returns):
Consent. The recipient must consent in the affirmative and not have withdrawn the consent before the statement is furnished. The consent by the recipient must be made electronically in a way that shows that he or she can access the statement in the electronic format in which it will be furnished.
You must notify the recipient of any hardware or software changes prior to furnishing the statement. A new consent to receive the statement electronically is required after the new hardware or software is put into service.
Prior to furnishing the statements electronically, you must provide the recipient a statement with the following statements prominently displayed.
* If the recipient does not consent to receive the statement electronically, a paper copy will be provided.
* The scope and duration of the consent. For example, whether the consent applies to every year the statement is furnished or only for the statement for a particular year, as applicable, immediately following the date of the consent…
There’s actually another fourteen bullets of requirements! If you’re really interested, you can check out the IRS docs.
Or, you can use Payable. We’ve baked all of these legal requirements into our app. Your vendors simply choose “E-delivery” or “Mail” and you remain compliant. E-delivered forms are securely accessible within our app. Physically mailed forms are handled automatically by our printing service.
It’s easy. It’s a great experience for your vendors. And, it gives you the peace of mind that you’re acting in a compliant way.