March 2022: The Small Business Owner’s HR, Benefits, Payroll and Tax Compliance Deadlines
A new month is right around the corner, which means it’s time for a new set of HR due dates and deliverables to keep track of. Keep reading for the important tax, payroll, and compliance deadlines to remember for the month of March.
No federal holidays in March means it’s full steam ahead for your company this month!
Tax and payroll compliance deadlines
Payroll tax deposits (for semi-weekly depositors)
The Internal Revenue Service (IRS) requires employers to make regular federal payroll tax deposits, although the frequency of these deposits depends on how much income and FICA taxes (that’s Social Security and Medicare taxes) you reported between July 1, 2020 and June 30, 2021 (the lookback period).
If you reported over $50,000 in payroll taxes during the lookback period, you’re considered a semi-weekly depositor and follow the schedule below:
If you reported less than $50,000 in payroll taxes during the lookback period, you’d follow a monthly deposit schedule instead (more on this later).
No matter your deposit schedule, you’re required to make your payments through the Electronic Federal Tax Payment System (or EFTPS for short). Make sure to submit your deposits on time, though, as late payments are subject to a penalty of up to 15%.
For more information on your payment schedule and federal payroll tax deposits in general, read Publication 15.
Keep in mind that you may be responsible for additional payroll tax requirements, depending on where your business is located. Check with your state and local tax agencies for more details.
March 1, 2022
Form 1099-R paper filing deadline
IRS Form 1099-R is used to report passive income and distributions from retirement plans, annuities, IRAs, pensions, and more. If you are mailing in paper versions of this form to the IRS, make sure to turn them in along with Form 1096 by March 1, 2022.
If you must file 250 or more of these forms, the IRS mandates that they be filed through the Filing Information Returns Electronically (FIRE) system. The e-filing due date for 1099-R forms was January 31, 2022.
Form 8809 paper filing deadline
Form 8809 is used to request an automatic 30-day due date extension for W-2, W-2G, 1042-S, 1095, 1097, 1098, 1099, 3921, 3922, 5498, and 8027, and 1094-C. The deadline for submitting paper forms is March 1, 2022. Find more information on e-filing Form 8809 below.
March 15, 2022
Payroll tax deposits (for monthly depositors)
If you reported $50,000 or less in payroll taxes during the lookback period, the IRS considers you a monthly depositor. Employers who follow a monthly deposit schedule must deposit their taxes from February by March 15, 2022.
Forms 1042 and 1042-S due
Form 1042 reports income tax withheld from distributions and certain other payments made to nonresident aliens. Form 1042-S, on the other hand, reports retirement plan distributions and certain other payments made to nonresident aliens that are subject to income tax withholding.
Both of these forms must be filed by March 15, 2022. The IRS recommends electronic filing of these forms through the FIRE system, but if you decide to file paper forms instead, make sure to submit Form 1042-T along with your documents.
S corp (Form 1120-S) and partnership (Form 1065) tax returns due
If your company is set up as an S corporation (or an LLC taxed as an S corp), you’ll use Form 1120-S to report your income, losses, and dividends as a shareholder of the company. Think of this document as a tax return for your company.
Similarly, Form 1065 is used to report the gains, losses, deductions, and credits of a business partnership (or an LLC set up as a partnership). Note that, in this scenario, your company would file a single tax form but isn’t responsible for paying the income tax itself. Each partner is responsible for paying their share of income from the business on their personal tax returns (Form 1040).
In addition to the tax return form itself, S corps and partnerships must also submit a Schedule K-1 that outlines the percentage of profits and losses assigned to each shareholder or partner in the business.
Turn in these forms to the IRS by March 15, 2022, unless you’ve applied for an extension (see next section).
Request for automatic extension of S corp and partnership tax returns due
If you need extra time to file your S corp or partnership tax return, submit Form 7004 to the IRS by March 15, 2022 to extend your deadline to September 15, 2022.
Since the IRS can charge you with hefty penalty and interest charges if you file your taxes late or provide incomplete documents, knowing you have the option to extend your deadline if needed can be extremely helpful. However, keep in mind that, even if you apply for an extension, you still need to estimate and pay your tax bill by the deadline—otherwise, your request can be denied.
March 31, 2022
Quarter 1 of 2022 ends
If your company follows a calendar year cycle, then the first quarter of the year ends on March 31, 2022.
Do I Need Payroll Software for My Small Business?Finances and Taxes
Deadline to file Forms 1099 electronically
The IRS uses variations of Form 1099 to track the different kinds of income or payments (besides salaries, wages, and tips) that taxpayers receive throughout the year. All 1099 forms must be turned in to the IRS by March 31, 2022 via the FIRE system if you plan to file electronically.
Form 5330 due
When employers offer benefit plans like 401(k)s and 403(b)s to their workers, they must make any required deposits in a regular and timely manner. After all, any contributions to these accounts compound with time, and late deposits can result in a loss of potential earnings for the employee.
To encourage companies to make these deposits on time, the IRS has a series of guidelines that employers must follow—and penalties if they don’t.
IRS Form 5330 is used to report and pay excise taxes on these missing earnings from employee benefit plans. Since the form is used for a variety of situations, the filing deadline depends on the reason for the excise tax.
Companies who issued failed Actual Contribution Percentage (ACP) and ACP test distributions more than 2.5 months after the end of the plan year must file Form 5330 with the IRS by March 31, 2022. They’ll also need to pay an excise tax of 10% of the total refund amount (not including investment gains).
Alternatively, you can file Form 5558 to request an extension of up to six months.
Form 8809 e-filing deadline
If you need additional time to file certain information returns—such as Forms 1094-C, 1099, or 8027—submit Form 8809 to the IRS by March 31, 2022 for an automatic 30-day extension of the deadline.
An additional 30-day extension can also be requested by filing another Form 8809. However, you’ll need to meet certain hardship condition qualifications in order to receive this second extension. Also note that this secondary extension isn’t available for Forms W-2 or 1099-MISC.
If you choose to take one or both of these extensions, keep in mind that they will only extend the filing due date. You’ll still be responsible for furnishing any required statements to the taxpayer recipients.
To request an extension for most forms, you can simply file Form 8809 online through the FIRE system or by mail. But for documents like Form 1099-MISC or W-2, you can only submit your request via mail.
HR compliance deadlines
March 1, 2022
HIPAA breach notification deadline for incidents involving fewer than 500 people
According to the HIPAA Breach Notification rule, HIPAA-covered entities are required to notify affected individuals if they experience a breach of unsecured protected health information, and report the event to the Office for Civil Rights (OCR).
Breaches that took place in 2021 and affected less than 500 people must be reported to those people and the OCR by March 1, 2022. Submit these notifications to the Secretary of the Department of Health and Human Services (HHS) on the HHS website.
March 2, 2022
Deadline for furnishing Form 1095-C to employees
Employers with 50 or more full-time equivalent employees (also known as applicable large employers, or ALEs) must send Form 1095-C to the IRS and to all of their employees who are eligible for health insurance coverage.
The due date for furnishing Form 1095-C to employees is March 2, 2022 (except for California employees, which was due January 31, 2022). If you decide to mail these forms instead of sending them electronically, they must be postmarked by this date.
Make sure to submit these forms on time, since the IRS doesn’t offer any extensions for this deadline.
OSHA Form 300A data electronic submission deadline
The Occupational Safety and Health Administration (also known as OSHA) requires most companies with 10 or more full-time workers to maintain a yearly record of all reportable workplace injuries and illnesses, along with the time and place they occurred and other relevant details, using Form 300A.
Additionally, employers that meet one of the following qualifications must electronically submit last year’s data to OSHA by March 2, 2022:
- Companies with at least 250 employees (including seasonal, part-time, and temporary workers) that are required to keep OSHA illness and injury records
- Companies with 20-249 employees in hazardous industries with high rates of workplace injury and illness
Companies with contractors and their own employees also have requirements: if the contractor has an employee who is under the day-to-day supervision of the contractor, the contractor is responsible for recording the injury or illness. If you supervise the contractor or their employee’s work on a day-to-day basis, you must record the injury or illness.
To learn more about these requirements and to submit your company’s data online, visit the OSHA website.
Deadline for creditable coverage disclosure (for calendar year plans)
The Medicare Modernization Act mandates that businesses that have Medicare Part D-eligible employees and offer group health care plans with prescription drug coverage must disclose to the Centers for Medicare & Medicaid Services (CMS) the creditable coverage status of their prescription drug plans.
Employers on a calendar year plan must submit this information online through the Disclosure to CMS form by March 2, 2022 (or within 60 days of the start of the plan year if they’re on a non-calendar year plan).
For more information, the CMS guide offers comprehensive instructions as well as screenshots to guide you through completing the form.
March 15, 2022
Distributions for failed ADP and ACP tests due
If your company offers 401(k) plans, you’re also responsible for testing these plans each year to make sure that contributions made for employees are proportional to those made for higher-compensated employees, such as managers and owners.
If your plan fails these nondiscrimination tests, also called the Actual Deferral Percentage (ADP) and Actual Contribution Percentage (ACP) tests, you must correct these shortcomings using the steps laid out in your plan document during the statutory correction period.
For plans following the calendar year, you’ll need to correct any excess distributions in your plan by March 15, 2022. Otherwise, you will be responsible for paying a 10% excise tax on those contributions.
To learn more about correcting 401(k) nondiscrimination test failures, review the recommendations outlined in the official IRS guide.
March 31, 2022
Due date for filing forms 1094-C and 1095-C to the IRS electronically
Employers providing Forms 1095-C to employees must also transmit these forms to the IRS. If you have 250 or more 1095-C forms to submit, you’re required to do so electronically through the Affordable Care Act Information Returns (AIR) platform by March 31, 2022. You’ll also need to turn in a Form 1094-C cover sheet along with these forms.
Note that, for the 2021 filing year, Form 1095-C contains two new codes. These codes should be used by any employer that has sponsored an individual coverage health reimbursement arrangement (ICHRA).
The IRS has also ended penalty relief for reporting errors in 2021, so it’s extra important that the information transmitted to the IRS for filing year 2021 is accurate and without error. In previous years, the IRS granted relief to employers if the employer filed on time and showed a good faith effort in resolving any filing errors or inconsistencies.
However, this year the IRS could impose a penalty of $280 for each form that is inaccurate or incomplete and provided to a participant, and a separate $280 for filing the same mistake with the IRS—for a total possible penalty of $560 per employee found with incorrect or incomplete information.
To learn more, read the 2021 Instructions for Forms 1094-C and 1095-C.