W-2 and 1099 FAQs

Why would there be withholding on a 1099?

The IRS determines if a person or business paying compensation to another person or business has an employee or contractor relationship. Generally, the type of income record form issued depends on the relationship (W-2s for employer/employee relationships; 1099s for independent contractor/non-employee relationships). As it relates to income tax, an employee relationship requires an employer to withhold on wages; in a contractor relationship, the worker is responsible for their own income tax. Generally, a contractor can request withholding from their pay. The business receiving contractor services could agree to withhold on the contractor's behalf.

Michigan follows federal withholding guidelines. For further information on determining of you have an employee or contractor relationship with someone who works for you, refer to IRS Publication 15, Employer's Tax Guide (Circular E) and the Michigan Unemployment Insurance Agency (UIA) Fact Sheet 155.

Does Michigan allow W-2 and 1099 submissions with truncated Social Security Numbers (SSNs)?

No, SSNs should be unobstructed and unaltered on W-2s and 1099s.

I need a copy of a W-2 or 1099 filed with Treasury. How can I get it?

Treasury cannot provide state copies of filed W-2s and 1099s. As these are federal forms, the IRS may be able to provide the federal or state copies.

I am the owner of a sole-member LLC. Do I need to issue myself a W-2 or 1099?

Treasury cannot provide tax preparation or legal advice. Michigan follows the federal guidelines surrounding issuance of W-2s and 1099s forms. Please contact the IRS or a qualified tax professional to answer this question.

Should I send W-2s and 1099s with the Annual Return for Sales, Use and Withholding (SUW) Taxes?

No, W-2s and 1099s must be sent separately from the SUW Annual Return, regardless of filing method.

Should I send W-2s and or 1099s with a copy of my already filed SUW Annual Return?

No. Do not send a copy of an already filed tax return with your W-2 and 1099 filing. This could lead to processing issues.

What is EFW2 and how does it apply to filing state copies of W-2s with Michigan?

EFW2 is a type of electronic data file format used by employers and service providers to send W-2 forms to the federal Social Security Administration (SSA). Every year, the SSA publishes a document, Specifications for Filing Forms W-2 Electronically (EFW2), which provides filing instructions and specifications on preparing data files in the EFW2 format. Taxpayers and service providers wishing to take advantage of this program must apply with the SSA.

You can upload a copy of the EFW2 file through the MTO W-2 and 1099 Guest Service to satisfy your Michigan reporting requirement.

My W-2s and 1099s are not in Publication 1220 or EFW2 format. Should I mail paper copies?

You are only required to electronically file in the specified magnetic media format if you issue 10 or more W-2s and 1099s. If you issue fewer than 10 income record forms, you may scan the physical forms and upload them in PDF format. Refer to Treasury's Income Record Forms Remittance Guide for all filing options.

Can I send my IRS file with all W-2s and 1099s issued or should I only report the Michigan forms?

While Treasury only requires the state copy of W-2s and 1099s, you do need to create a separate file for Michigan-specific records for upload through Michigan Treasury Online.

I filed 1099 data through my e-filing service. Does this guarantee Michigan will receive copies as well?

You should check with software provider. Treasury cannot guarantee your service provider will send state copies of W-2s and 1099s to Michigan. If you need to file directly with Treasury, refer to Treasury's Income Record Forms Remittance Guide for all filing options.

I submitted W-2s electronically through my e-filing service and received confirmation that the SSA has received our submission. Do I still have to send a copy to Treasury?

Yes, you must file W-2 data directly with Treasury if your software provider is not doing it for you because the SSA does not file share. If you need to file directly with Treasury, refer to Treasury's Income Record Forms Remittance Guide for all filing options.

I mailed W-2s to the Social Security Administration (SSA). Do I need to file these forms with Michigan directly?

Yes. The SSA does not file share with Michigan or other states. Refer to Treasury's Income Record Forms Remittance Guide for all filing options.

Does the IRS share W-2 and 1099 data with Michigan if the forms were mailed to the IRS?

No. The IRS only shares certain forms with Michigan if filed through the FIRE System and the form qualifies for the Combined Federal/State Filing Program (CF/SF). The exception here is Form 1099-NEC which must be filed directly with Treasury regardless of federal filing method.

Refer to Treasury's Income Record Forms Remittance Guide for all filing options.

On MTO, in the W-2 and 1099 History table, I noticed the name of my W-2 or 1099 file changed. Did I do something wrong?

You did nothing wrong. We convert your computer file name to a file name that is compatible with our system. The confirmation number and date of submission listed in the History table is your proof of W-2 or 1099 submission.

Am I required to file all income record forms using a single method, or can I choose multiple filing options?

It depends. Issuers with 10 or more income record forms must use MTO to send a magnetic media formatted file electronically. Issuers with fewer than 10 income record forms may utilize any filing option listed in Treasury's I. Business taxpayers, issuers, and service providers are encouraged to send state copies of W-2s and 1099s to Treasury electronically whenever possible.

My business is not liable for business taxes in the State of Michigan. How do I file 1099 forms?

Any issuer may file forms electronically through the MTO W-2 and 1099 Guest Service. If the issuer has fewer than 10 forms, they may file by physical magnetic media or mail. Refer to Treasury's Income Record Forms Remittance Guide for details on all filing options.

I am mailing W-2s and 1099s for multiple companies. Can I put them all in the same envelope or should they be mailed separately by issuer?

How can I confirm Treasury received filed income record forms?

To ensure receipt of W-2s and 1099s, use Michigan Treasury Online (MTO). You will receive a confirmation number when your upload is transmitted successfully.

Is Form 1099-DA required to be filed with Michigan for tax year 2025?

The state copy of Form 1099-DA is required to be filed with Treasury if there is a Michigan impact. 1099s, including 1099-DA, must be filed with Michigan Treasury whenever issued to a Michigan resident, without regard to where the issuer is domiciled, where the resident's work, services, or transactions occurred, or whether or not withholding is indicated on the form.

Form 1099-DA is used to report digital asset proceeds from broker transactions (e.g., crypto exchanges, non-fungible token (NFT) platforms, and digital wallet providers). The reporting requirements begin tax year 2025, for transactions occurring on or after January 1, 2025.

Federally, the Filing Information Returns Electronically (FIRE) system does not support the electronic filing of Form 1099-DA. Instead, Form 1099-DA can only be electronically filed through the federal Information Returns Intake System (IRIS). Michigan is not currently receiving copies of 1099 forms filed through IRIS. Therefore, applicable 1099-DA information must be filed directly with Treasury. Refer to Treasury's Income Record Forms Remittance Guide for all direct filing options.