Shout out to my TPA Peeps on 1099-Rs

We do most of our 1099s through FT "fulfillment" service where the print/mail/ and send everything to the IRS.  But after 1/31 we need to do them manually (for example when a client only tells us about it now).

For years we have been ordering the IRS's red ink 1099s and trying to print the 1099s on those before mailing hard-copy to participants.  Can someone explain to me why I am making my life so much more difficult even though I know from doing my own takes that taxpayers don't even send those to the IRS??  Are people sending this out just on regular whit paper??  If there was a compelling reason I would be all over it but if there is one I just can't see it...

The red forms are Copy A for the Internal Revenue Service Center.  A Form 1096 is used Annual Summary and Transmittal of U.S. Information Returns is used to send these forms to the IRS.  Hopefully, you also also have been preparing the Form 1096 and sending the red copies to the IRS.

To answer your question, you can send the participant copies (Copy 1, Copy B, Copy 2, Copy C) and the payer's copy (Copy D) on plain paper.

There are two reasons for using the red forms:

• it is scannable by the IRS, and
• it protects against submission of multiple copies of the same form for the payee.

Typically, if a TPA is preparing the Form 1099R's on behalf of the plan and the plan is the Payer.  There is a threshold for mandatory electronic filing is reduced to 10 forms for form filed in 2024 (including filing forms for the 2023 tax year), and the count is based on almost all 1099's and W2's.  The plan as the Payer may not reach this threshold, but most companies will.  https://www.irs.gov/filing/e-file-information-returns

It is possible to file forms directly with the IRS using their IRIS Taxpayer Portal.  You need to have a TCC (Transmitter Control Code) to do this.  The IRS says this can take up to 45 days to get, although anecdotally they have been obtained much faster than that.

FYI, there are service providers that mirror the FT fulfillment service who continue to print/mail/ and send everything to the IRS for a nominal fee.

FTW will still do 1099s after the deadline, I think it might cost more but well worth it. At least that's what I remember.

I have done the red forms for personal stuff (1099-MISC) and...what a pain, trying to get it lined up.

8 minutes ago, Bird said:

.what a pain, trying to get it lined up

100% thats the problem.  Our admin person will spend 45 minutes trying to get it to line up!

I will ask FT but I thought they would not do the fulfillment piece post 1/31. 

@Paul I that was the missing link for me, thank you. The red copy goes to the IRS not the participant.  I get it.  If FT can't do it we might work with another vendor for the one-offs, that's probably not a bad idea.

Not surprisingly (because I think FTWillilam is so awesome) they can do them all year long.  The fees are very modest.  I'm actually a little embarrassed I misinterpreted all of their caveats about processing deadlines at the end of January.  In hindsight those deadlines obviously only related to hitting the 1/31 deadline.

Thanks everyone!!