Litigation

The deadlines to file Forms 3921 and 3922 with the IRS are February 28 for paper filers and March 31 for electronic filers.  The deadline for distributing the statements to employees is still January 31.  Even if employers file the returns with the IRS electronically, most will likely still distribute hardcopy statements to employees because the requirements to distribute the statements electronically are very difficult to satisfy. 

Electronic Filing

Employers are required to file Forms 3921 and 3922 electronically if they have at least 250 returns to file.  This is a per-form requirement, so if an employer has 251 Forms 3921 to file and only 249 Forms 3922, then it must file only the Forms 3921 electronically.  Likewise, if it has 249 of each to file, then it is not required to file either of the forms electronically.  However, employers may always file electronically on a voluntary basis since doing so extends the filing deadline.  If employers are eligible to file paper forms, they may complete the forms manually, as handwritten forms are acceptable (provided the writing is very neat and legible).  Additional instructions for electronic filing are available in IRS Publication 1220(a reprint of Rev. Proc. 2010-26).

Employers subject to mandatory electronic filing may eventually be able to request a waiver by filing Form 8508.  Unfortunately, the form does not yet include Forms 3921 and 3922.  The IRS may fix that in the near future.  Until then employers may want to use the assistance of an electronic filing vendor to help them file electronically.  The IRS posted a list of such providers in January of this year.