IRS e-filing mandate: what the new 10-form rule means for HR

Executive overview

The IRS now requires most businesses to file tax forms electronically, no matter how few forms they generate. The old threshold of 250 forms per type has been replaced by a combined limit of just 10 forms across all types. Small businesses that previously filed on paper may no longer have that option.

Evaluate your HR or payroll platform now — non-compliant filing costs up to $290 per form.

What changed with the 10-form rule

• Previously, each form type was counted separately; paper filing was allowed if any single type stayed under 250
• Now, all form types are counted together; if the combined total reaches 10, e-filing is required
• Example: 3 W-2s + 4 1099s + 3 941s = 10 forms total — e-filing required
• Even very small businesses with a handful of employees are likely affected

Penalties and compliance steps

• Filing on paper when e-filing is required: up to $290 per form
• Annual penalty cap exceeds $3.5 million for larger businesses; over $1 million for smaller ones
• Check whether your HR platform includes built-in e-filing for ACA and payroll forms
• Payroll providers or point solutions can fill the gap if your current system lacks e-filing
• Verify that any third-party solution integrates cleanly — errors still carry penalties