The IRS Electronic Filing Mandate
Below a threshold of ten information returns in aggregate, you can still file on paper. At ten or more, electronic filing is required - and the count aggregates across W-2s and 1099 series forms, so small employers clear it faster than they expect.
How the count works
The threshold is measured across the aggregate of information returns you file for the year: W-2 wage statements plus the 1099 family, including 1099-NEC, 1099-MISC and 1099-DIV. Ten returns in total puts you into mandatory e-filing for all of them.
A business with five employees and six contractors is past the threshold before it feels like a filer of scale.
What e-filing requires
- Filing through the IRS FIRE system or an authorized provider.
- Software or a provider that generates the electronic specification files.
- Recipient copies delivered separately by their own deadline.
If payroll and contractor payments run through one system, this is handled as part of year-end processing. If they run separately, the aggregation is exactly what gets missed. See end-of-year forms for the calendar.
Waivers and penalties
A hardship waiver exists, but it must be requested in advance of the deadline, not after missing it. Penalties for filing late or on paper when required scale with how late the return is, and larger payers face higher per-form amounts. Penalties adjust over time; see indexed reporting penalties. Two nuances worth knowing: corrected returns do not count toward the ten-return tally, and the legacy FIRE system retires after tax year 2026, leaving the free IRIS portal as the IRS intake path. The full rule is at IRS Topic 801.
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Frequently asked
Do recipient copies also have to be electronic?
No. Employees and contractors can still receive paper copies, though electronic delivery is allowed with consent or secure access.
Is the threshold per form type?
No, it is aggregate. Ten total information returns of any covered type triggers e-filing for all of them.
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