The IRS lowered the mandatory e-filing threshold from 250 returns to just 10 returns. This change took effect January 1, 2024, through Treasury Decision 9972. If your firm files 10 or more information returns, you must e-file them.
This isn't optional. Penalties for non-compliance range from $70 to $680 per form. For firms handling even modest client volumes, that adds up fast.
Here's what the rule means for your practice and what you need to do about it.
Understanding the 10-Return Threshold
The rule is straightforward: file 10 or more information returns, and electronic filing becomes mandatory.
The catch? The IRS counts all your information returns together. They don't calculate each form type separately.
Example: Your firm files four Forms 1098 and six Forms 1099-A. That's 10 total forms. You must e-file.
This aggregation requirement catches many small practices off guard. Tax pros who previously flew under the 250-return radar now find themselves subject to mandatory e-filing requirements.
Which Forms Count Toward the Threshold
The 10-return threshold applies to most common information returns:
1099 Series:
- 1099-MISC
- 1099-NEC
- 1099-INT
- 1099-DIV
- 1099-B
- 1099-S
- 1099-A
- Most other 1099 variants (excluding Form 1099-DA)
Other Covered Forms:
- Forms W-2
- 1098 series
- Forms 3921 and 3922
- 5498 series
- Form 8027
- Form 8955-SSA
- Form 8596
- Form 1042-S
- Form 1097-BTC
- Form W-2G
Count every form across all these categories. Once you hit 10, e-filing is required.
The Filing Systems You Need to Know
The IRS doesn't use a single e-filing system. Different forms go through different channels.
FIRE (Filing Information Returns Electronically)
Used for most 1099 forms and information returns submitted directly to the IRS. This is the primary system for the majority of information return e-filing.
SSA (Social Security Administration)
Forms W-2 go through the Social Security Administration, not the IRS. Employers must register through Business Services Online to submit W-2s electronically.
AIR (ACA Information Returns System)
Used specifically for Affordable Care Act reporting: Forms 1094-B, 1095-B, 1094-C, and 1095-C.
Understanding which system handles which form is critical for compliance.
The Transmitter Control Code Requirement
Before you can e-file with IRS systems, you need a Transmitter Control Code (TCC).
The TCC is a five-character alphanumeric code that identifies your firm within the IRS e-filing infrastructure. Without it, you cannot transmit information returns electronically.
Important: Allow up to 45 days for TCC processing. If you don't have one yet, apply immediately. Waiting until filing season creates unnecessary compliance risk.
The application process involves:
- Creating an IRS e-Services account
- Completing the TCC application
- Waiting for IRS approval
- Testing your transmission capability
This isn't something to handle at the last minute.
2026 Filing Deadlines
Mark these dates for the 2026 filing season:
| Form Type | IRS E-Filing Deadline |
|---|---|
| 1099-MISC (boxes 8-10) | Monday, March 2, 2026 |
| 1099-MISC (standard) | Tuesday, March 31, 2026 |
| 1099-B | Tuesday, March 31, 2026 |
| 1099-DA | Tuesday, March 31, 2026 |
| 1099-S | Tuesday, March 31, 2026 |
Note the split deadline for 1099-MISC forms. Forms with entries in boxes 8, 9, or 10 (substitute payments and crop insurance proceeds) have an earlier deadline than standard 1099-MISC filings.
Penalty Structure for Non-Compliance
Failing to e-file when required triggers penalties based on how late you correct the issue:
$70 per form : Corrected within 30 days of the due date
$140 per form : Corrected between 31 days and August 1
$340 per form : Filed after August 1 or never filed
$680 per form : Intentional disregard (no maximum penalty cap)
For small businesses with gross receipts of $5,000,000 or less, the maximum penalty for non-intentional violations is $1,397,000.
Large businesses face maximums up to $4,191,500.
These aren't theoretical penalties. The IRS enforces them. A firm filing 100 information returns on paper when e-filing is required could face $34,000 in penalties: or more if the situation is deemed intentional.
What If You Don't Have an EFIN?
Many tax preparers file returns under a service bureau arrangement rather than obtaining their own Electronic Filing Identification Number (EFIN).
This creates a common question: How do you comply with mandatory e-filing requirements without your own EFIN?
The answer: Work with a service bureau that handles e-filing on your behalf.
A service bureau provides the technical infrastructure, compliance support, and transmission capabilities you need. You prepare the returns. They handle the electronic submission.
This model works especially well for:
- New tax practices without established IRS credentials
- Solo practitioners who don't want to manage e-filing infrastructure
- Firms transitioning from paper-based filing
- Tax professionals who want to focus on client work, not technology
TIG Tax Pros offers service bureau support designed specifically for this situation. You get full e-filing capability without the overhead of maintaining your own EFIN and transmission systems.
State Filing Considerations
Over 40 states participate in the Combined Federal/State Filing (CF/SF) program.
When you e-file information returns with the IRS, participating states receive copies automatically at no additional cost. This simplifies multi-state compliance significantly.
However, not every state participates. Some states require:
- Separate filing submissions
- Different deadlines than federal requirements
- Lower thresholds than the federal 10-return rule
- Additional forms or data elements
Verify requirements for each state where you conduct business. Assuming federal e-filing covers all state obligations is a compliance risk.
Action Steps for Your Practice
Immediate actions:
- Count your total information returns across all form types
- Determine if you exceed the 10-return threshold
- Verify you have a valid TCC or service bureau arrangement
- Review your e-filing software capabilities
Before filing season:
- Test your transmission capability with the IRS
- Confirm your service bureau relationship is current
- Update client intake processes to capture required data
- Train staff on e-filing procedures
If you need help:
Tax professionals without an EFIN or established e-filing infrastructure should explore service bureau options now. Setting up these arrangements takes time. Starting mid-season creates problems.
The Bottom Line
The 10-return threshold affects far more tax practices than the previous 250-return rule. If you file information returns for clients, you almost certainly need to e-file.
Compliance requires either your own EFIN and TCC credentials or a service bureau arrangement that handles e-filing on your behalf.
Penalties for non-compliance are substantial. The time to address this is now: not when deadlines approach.
Review your current setup. Identify gaps. Take action before the 2026 filing season intensifies.