Filing Requirements for 1099 Reporting

Employers must submit their required annual withholding statements in machine readable or electronic format if the total number of required statements equals or exceeds 100 for tax year 2007. The electronic format is also required if a lower threshold applies for federal income tax purposes.

Filers must file magnetic media in the IRS format cited in IRS Publication 1220 (Rev. Proc. 2007-51) for filing forms 1098, 1099, 5498 and W-2G, magnetically or electronically.

Maryland requires a 1099G, 1099R, 1099S and W-2G for every Maryland payee who receives a payment of $10 or more during the tax year being reported.

Only one file name is allowed for each diskette. The file name must be IRSTAX.

The required records are:

T Transmitter Record (Same as IRS)
A Payer Record (Same as IRS)
B Payee Record (Modified, record description below)
C End of Payer Record (Same as IRS)
K Use for combined federal/state filing program (Same as IRS)
F End of File Record (Same as IRS)

Failure to comply with the 1099 data reporting rules may result in a penalty of $50 for each violation, along with a $50 penalty or each 1099 that is not properly filed. Additional penalties may be assessed for failing to comply with Section 13-706 of the Tax-General Article, Annotated Code of Maryland.