United States · Federal · Employer and payer penalties
Information return penalties 2027.
What the IRS charges per form for a late, missing or wrong Form 1099 or W-2 for tax year 2027, and how the caps and correction windows change it.
Short answer: For forms for tax year 2027 that are due in 2028, the general penalty is $360 per return. It drops to $140 if you fix the failure after 30 days but by August 1, 2028, and to $70 if you fix it within 30 days of the due date. The same amounts apply to the copies you owe the recipient. A business with average gross receipts of $5,000,000 or less is capped at $1,442,500 a year; larger businesses at $4,327,500. Intentional disregard costs the greater of $720 or 10 percent of the amount that should have been reported.
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The 2027 amounts at a glance
Section 6721 of the Internal Revenue Code penalizes a filer that does not file a correct information return with the IRS on time. Section 6722 does the same for the payee statement the filer must give the recipient, such as the copy of a Form 1099 or W-2 sent to a contractor or employee. The two penalties are separate, so one missing 1099 can draw both. The dollar amounts are indexed each year; Revenue Procedure 2026-35 sets them for returns and statements required to be filed or furnished in 2028, which covers forms for tax year 2027.
| Failure fixed | Per form, forms due 2027 (tax year 2026) | Per form, forms due 2028 (tax year 2027) |
|---|---|---|
| After August 1, or never | $340 | $360 |
| After 30 days, by August 1 | $130 | $140 |
| Within 30 days of the due date | $60 | $70 |
| Intentional disregard, minimum | $690 | $720 |
Each tier has a calendar-year ceiling that depends on the size of the filer. The test is average annual gross receipts for the most recent three taxable years.
| Failure fixed | Cap, receipts $5,000,000 or less (2027 forms) | Cap, receipts over $5,000,000 (2027 forms) |
|---|---|---|
| After August 1, or never | $1,442,500 (was $1,397,000) | $4,327,500 (was $4,191,500) |
| After 30 days, by August 1 | $721,000 (was $698,500) | $2,163,500 (was $2,095,500) |
| Within 30 days | $252,000 (was $244,500) | $721,000 (was $698,500) |
Intentional disregard has no cap
If the failure is due to intentional disregard of the filing requirement or of the correct reporting requirement, the penalty per return is the greater of $720 or 10 percent of the aggregate amount of the items that should have been reported correctly, and there is no calendar-year maximum. The percentage is 5 percent for returns under sections 6045(a), 6050K and 6050L, which cover broker, exchange and similar reporting. The calculator applies the 10 percent rule unless the minimum is higher.
Corrections that cost nothing
The statute carves out two de minimis rules. If a return is filed but has an error and the error is corrected by August 1 of the year the return was due, the return is treated as correct, up to the greater of 10 returns or one-half of 1 percent of the returns you were required to file. Separately, when a dollar amount is off by no more than $100, and an amount of tax withheld is off by no more than $25, no correction is required at all. Neither rule helps with a return that was never filed.
What changed from 2026
Every amount rose a little. The general per-return penalty went from $340 to $360 (up $20), the August 1 tier from $130 to $140 and the 30-day tier from $60 to $70. The intentional-disregard floor moved from $690 to $720, and the small-business annual cap from $1,397,000 to $1,442,500. The 2026 figures stay in force for forms due in 2027. The dates also move: the August 1 deadline is August 1, 2028 for 2027 forms.
Worked example (2027)
A small business with average gross receipts under $5,000,000 pays 25 contractors and never files their 2027 Forms 1099-NEC or sends them copies. Each failure is $360: 25 returns times $360 is $9,000 to the IRS, and another $9,000 for the recipient copies, so $18,000 in all, well under the $1,442,500 cap. If it files all 25 on August 1, 2028, each return is $140 and the bill is $3,500 for the returns and $3,500 for the statements. Filed within 30 days of the due date it would be $70 each, or $1,750 per set. If the business had knowingly ignored the rule on payments of $20,000 each, the minimum of 10 percent is $2,000 per form, so 10 such forms cost $20,000 with no cap.
Common mix-ups
- The penalty is per form, not per filer. Twenty-five missing forms are twenty-five penalties, until the annual cap is reached.
- Returns and recipient copies are two penalties. Section 6721 covers the filing with the IRS and section 6722 covers the statement to the payee, each with its own cap.
- The size test looks back three years. It is average gross receipts for the three most recent taxable years, not this year alone.
- These are the 2027 forms. Forms for tax year 2026, filed in January 2027, use the $340 amounts.
- Filing late can still be cheaper than not filing. The $70 and $140 tiers reward a quick fix, but they apply only once the correct return is on file.
Method
The calculator picks the per-form amount for the tier you choose, multiplies by the number of forms, and stops at the calendar-year cap for your size. If you tick the recipient-copy box it counts a second, separate set with its own cap. For intentional disregard it uses the greater of $720 or your percentage of the amount reported per form and applies no cap. It does not apply the de minimis exceptions, reasonable-cause relief or the separate rules for certain broker returns. Figures were read on November 9, 2026.
What this does not cover
- Reasonable-cause and waiver relief, which can remove a penalty entirely.
- Penalties on the underlying tax, backup withholding failures or state information-return penalties.
- Late-filing penalties on income tax returns; see the failure-to-file page for those.
- Filing due dates, which are set in the form instructions.
Figures read from the sources below on November 9, 2026. Last updated November 9, 2026.
Sources
- IRS Revenue Procedure 2026-35, section 3.62 (section 6721 amounts) (retrieved November 9, 2026); IRS Revenue Procedure 2026-35, section 3.63 (section 6722 amounts) (retrieved November 9, 2026)
- IRS Revenue Procedure 2025-32, section 4.57 and 4.58 (the 2026 amount) (retrieved November 9, 2026)
- 26 U.S.C. section 6721 (failure to file correct information returns), text at Cornell Legal Information Institute (retrieved November 9, 2026)
- 26 U.S.C. section 6724 (definitions), text at Cornell Legal Information Institute (retrieved November 9, 2026)
Frequently asked questions
What is the 2027 penalty for filing a 1099 late?
For returns due in 2028 the general penalty is $360 per return, $140 if corrected after 30 days but by August 1, 2028, and $70 if corrected within 30 days of the due date.
Does the penalty apply to W-2 forms too?
Yes. Sections 6721 and 6722 cover information returns and payee statements, and the definitions in section 6724 reach forms such as the W-2 and the 1099 series.
What is the maximum penalty for a small business?
For a business with average annual gross receipts of $5,000,000 or less over the last three years the general cap is $1,442,500 a calendar year for returns and the same for payee statements.
What if I never file the form?
The general $360 rate applies per form, up to the cap. If the failure is intentional, the penalty is the greater of $720 or 10 percent of the amount that should have been reported, with no cap.
Is there a penalty for giving the contractor a wrong copy?
Yes. Section 6722 applies the same per-statement amounts to a missing or incorrect payee statement, in addition to any section 6721 penalty on the IRS copy.
When does the August 1 deadline apply?
The $140 tier applies to failures corrected after the 30th day but on or before August 1 of the year the return was due. For 2027 forms that is August 1, 2028.
Can the penalty be waived?
The statute allows relief for reasonable cause and has de minimis rules for small errors. This page does not model them, so check the instructions for the form.
Not legal or tax advice
This page is general information from an unofficial guide, not legal, payroll or tax advice. Tax law changes and your facts may differ. Confirm figures with the IRS or a tax professional before you file or set payroll. Nothing you type is sent anywhere.