For tax year 2024, several significant updates have been introduced for 1099 forms, especially concerning electronic filing and reporting for third-party payments. Key changes include:

Mandatory E-Filing for 10+ Forms: Businesses must file electronically if they submit 10 or more information returns, such as 1099s or W-2s. This is a shift from the previous threshold and is part of the IRS's efforts to streamline data collection through digital submissions. This rule applies across various 1099 types, such as 1099-NEC (for non-employee compensation) and 1099-MISC (for miscellaneous income).

Lower Reporting Thresholds for 1099-K: The threshold for issuing Form 1099-K has been reduced for 2024. Now, businesses or individuals who receive over $5,000 in payments via third-party platforms (like PayPal or Venmo) will require a 1099-K. This shift means more taxpayers, including smaller businesses and freelancers, will likely receive this form in 2024.

IRS Form 15397: Starting in tax year 2024, you can use Form 15397, Application for Extension of Time to Furnish Recipient Statements, to request a one-time 30-day extension to furnish copies of statements to recipients.

Combined Federal/State Filing: New combined federal state code for Rhode Island is 44. .

These changes mean that small and large businesses alike will need to be prepared for expanded reporting responsibilities in 2024.