2021 Maryland Employer Reporting of 1099s Instructions and Specifications October 2021 Revenue Administration Division Annapolis, MD 21411-0001 Peter Franchot, Comptroller
| 2021 Maryland Employer Reporting of 1099s Instructions and Specifications October 2021 Revenue Administration Division Annapolis, MD 21411-0001 Peter Franchot, Comptroller |
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Table of Contents
Document Change Log .............................................................................................. 3
Introduction ................................................................................................................. 3
Filing Requirements for 1099 Reporting ........................................................... 3
Upcoming Changes and Enhancements .............................................................. 4
Annoucement –Last Year for filing via Disketts/CDs .................................... 4
Media Specifications ................................................................................................. 5
Diskettes and CDs ............................................................................................................................5
Updates for Tax Year 2021 ..................................................................................... 6
Reminders for Tax Year 2021 ................................................................................ 6
Most Common Errors to Avoid .............................................................................. 8
Record Format Rules ................................................................................................ 9
Maryland Record Layout Tax Year 2021 .......................................................... 10
“B” Record Modified for Maryland Reporting ................................................................. 10
Frequently Asked Questions ................................................................................ 11
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Document Change Log
Date Page Description
11/7/2021 page 3 • Filing Deadline: January 31, 2022
page 3 & 5 • MD follows new IRS Form 1099-NEC requirements
page 4 • Filing Year 2022 (for Tax Year 2021) is the last year
Maryland will be accepting magnetic media
(Diskettes/ CDs).
pages 8 • There are record layout changes for Tax Year 2021 for
the records field that state ‘Same as IRS’. See.
Pulication 1220 for modifications.
Introduction
Maryland law requires employers to submit their annual Withholding Reconciliation
using the magnetic media format if the total number of 1099 statements meet or exceed
25. We encourage all employers, regardless of the number of 1099s, to file using
magnetic media.
The filing due date for 1099 statements/MW508 return is January 31st . If the due
date falls on a Saturday, Sunday or legal holiday, it must be filed by the next business day.
The 2021 Maryland Reporting Instructions and Specifications Handbook for 1099s is
designed to be used as a companion to the IRS Publication 1220 Specifications for
Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, 8935 AND W-2G
Tax Year 2021. Since many functions of the Maryland employer-reporting program are
similar to the IRS program, this handbook highlights the special requirements of the
Maryland program.
Filing Requirements for 1099 Reporting
Filers having 25 or more 1099 statements must file magnetic media in the IRS format
from Publication 1220 Specifications for Electronic Filing of Forms 1097, 1098, 1099,
3921, 3922, 5498, 8935 AND W2-G.
Maryland requires a 1099-G, 1099-R, 1099-S and W-2G for every Maryland payee who
receives a payment of $10 or more during the tax year being reported.
Note: Maryland only requires a 1099-MISC and 1099-NEC from the payee (or
employer) when there is Maryland withholding greater than zero.
Failure to comply may result in a penalty of $100 for each violation. Each 1099 that is not
properly filed is a separate violation subject to the above penalty. Failure to comply with
Section 13-706 of the Tax-General Article, Annotated Code of Maryland may result in the
assessing of additional penalties.
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Upcoming Changes and Enhancements
Maryland continues to participate in the Combined Federal/State Filing Program for
Forms 1099.
Note: Prior to your submission to Combined Federal/State Filing, the 1099 file must
include the modified B record(s) containing the required Central Registration
Number (CRN) in positions 715-722.
1099 filers who do not participate in the Combined Federal/State
Filing Program, should submit either their magnetic media file or paper returns with
1099s directly to Maryland by January 31st, each year.
Annoucement –Last Year for filing via Disketts/CDs
Filing Year 2022 (for Tax Year 2021) is the last year Maryland will be accepting
magnetic media (Diskettes/ CDs). For Filing Year 2023 (Tax Year 2022), Maryland will
require 1099 text files to be placed at the Comptroller of Maryland secure server by SFTP
(Secure File Transfer Protocol), using one of the following two methods:
• Option 1: Manually upload to Comptroller of Maryland SFTP website
• Option 2: SFTP automated server to server transmission in which an IP address will
be required to be whitelisted with Comptroller, State of Maryland
Please email SecureTransmission@marylandtaxes.gov no later than October 2022 to obtain
your SFTP 2023 Account info along with instructions for setup. In the email, please
provide the following:
• Point of Contact Email address
• Business Name
• Point of Contact Name
• Point of Contact Number
• Business choice of (SFTP) either Option 1 or Option 2 or both
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Media Specifications
Diskettes and CDs
The Maryland Revenue Administration Division uses the following criteria in acceptance
of magnetic media:
• Diskettes must be double-sided, double-density or high-density, MS-DOS version or
compatible operating system.
• All diskettes and CDs must be virus scanned before submission.
• Only one file name is allowed. The file name must be “IRSTAX” for 1099 data. Do not
add an extension (e.g., “.dat”, “.bak”).
• The external labels must have the company name, FEIN, the proper sequence (e.g.,
VOL 2 of 3), and type of data (W-2 or 1099). A contact number and name is necessary
if the disk arrives damaged.
• Data must be uppercase letters in ASCII.
• Inspect the file prior to placing on media to verify that each record type (T, A, B, C, K,
F) starts on a new row.
• File should include record delimiters (CR- Carriage Return followed by LF –Line
Feed). Each record delimiter must consist of a carriage-return/linefeed (CR/LF) and
placed immediately following position 750. Do not place a record delimiter before the
first record (T) of the file.
• Multiple companies can be submitted within one file. Be sure to repeat each set of
record types (T, A, B, C, K, F) in this sequence for each company.
• Files may be compressed using PKZIP or WinZip. Please indicate on the label if the file
is zipped and a contact name and number to retrieve the password
• Maryland no longer accepts cartridges or tapes.
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Updates for Tax Year 2021
Starting in tax year 2021 and going forward, the IRS has removed reporting for
nonemployee compensation from Form 1099-MISC, box 7 to Form 1099-NEC. Maryland
will follow the IRS guidelines for reporting of nonemployee compensation. Information
for submitting this information can be found online at https://www.irs.gov/pub/irs-
pdf/i1099mec.pdf or in the IRS Publication 1220.
Please keep in mind that the following:
Maryland only requires a 1099-MISC and 1099-NEC from the payee (or employer)
when there is Maryland withholding greater than zero.
Reminders for Tax Year 2021
1. The filing due date for 1099 wage/tax statements is January 31 .st
2. It is a requirement to provide the Federal Employer Identification Number (FEIN) and
the corresponding Central Registration Number (CRN) in positions 715-722 of the B
record. Not providing this information will either delay the processing time or will be
cause for the file to be rejected.
3. Amounts reported on a paper Form MW508 are for paper submission only; if you are
providing additional information by media, exclude that which was reported on paper.
Duplicate filings create a bill, erroneous balance due notices and/or penalty notices
for the empoyer.
4. If you outsource your payroll, please provide the CORRECT Federal Employer
Identification Number (FEIN) and the Maryland Central Registration Number (CRN).
5. The Comptroller of Maryland will only accept 3 ½-inch diskettes and CD submissions.
6. Flash and thumb drives are not permitted.
7. The Comptroller of Maryland requires a 1099-G, 1099-R, 1099-S, and a W-2G Form
for every Maryland payee that receives a payment of $10 or more during the tax year
being reported.
8. Maryland only requires a 1099-MISC and 1099-NEC from the payee (or employer)
when there is Maryland withholding greater than zero.
9. If the payer (employer, organization, etc.) should withhold state taxes that are
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reported on a 1099-MISC for Maryland payee(s), then the 1099-MISC should be
included in the payer's annual reconciliation for the tax year reported. If there is no
1099-MISC Maryland withholding, then there is no need to submit this 1099-MISC
information to the state. This is also true for the Form 1099-NEC.
10. TheComptroller of Maryland is a participant in the IRS Combined Federal/State
Filing Program. The following resources are available:
a. The IRS format from Publication 1220, Specifications for Electronic Filing of Forms
1097, 1098, 1099, 3921, 3922, 5498, 8935 and W-2G
b. The Magnetic Media Guide 1099 Instructions and Specifications,
Section: “B” Record Modified for Maryland Reporting
11. If you are participating in the Combined Federal/State filing program, do not
send paper or media with the same returns that are being reported to the IRS.
The IRS will forward the 1099 information to Maryland. Additionally, if the IRS
includes the 1099-NEC in the Combined Federal/State filing program, then Maryland will
accept the 1099-NEC from the IRS.
12. Current and prior year data may be submitted in the same shipment however, each
tax year must be on separate media.
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Most Common Errors to Avoid
• Failure to include the “A ”record.
• Failure to include the Federal Employer Identification Number (FEIN) on the “A”
record, position 12.
• Failure to modify the B record to include the required Central Registration Number
(CRN) in positions 715-722 or failure to place the required Central Registration
Number in the correct location.
• Failure to include the “C” record containing the MW508 information.
• Using the Unemployment Insurance number instead of the Maryland Central
Registration number.
• Using the FEIN instead of the Maryland Central Registration number.
• Sending PDF, MSWord or Excel 1099 files on media. These are not acceptable
formats. This will result in a failed submission and may cause erroneous balance due
notices and/or penalty notices.
• Failure to include record delimiters (CR- Carriage Return followed by LF –Line Feed).
Each record delimiter must consist of a carriage-return/linefeed (CR/LF) and placed
immediately following position 750.
• Failure to verify each record type (T, A, B, C, K, F) starts on a new row.
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Record Format Rules
All fields in the record layouts are required and must follow the formatting rules as
follows:
Alpha fields (Alphabetic characters and blanks only)
• Left-justify and fill with blanks.
Numeric fields (Numeric characters only)
• Right-justify and fill with zeroes.
• Fill unused fields with zeroes.
Alpha/numeric fields (Alphabetic, numeric and blanks are allowed)
• Left-justify and fill with blanks.
• Fill unused fields with blanks.
Money fields
• Must contain only numbers.
• No punctuation.
• No signed amounts (high-order signed or low-order signed).
• Include both dollars and cents with the decimal point assumed (example: $59.60 =
000000005960).
• Do not round to the nearest dollar (example: $5,500.99 = 000000550099).
• Right-justify and zero fill to the left.
• Any money field that has no amount to be reported must be filled with zeroes.
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Maryland Record Layout Tax Year 2021
Attention: There have been changes to the record layouts for tax year 2021 for the field
position that are the same as IRS. Please, review Publication 1220. Only the addtional
record, the 1099-NEC, entered with a separate code for fields 547-548 of the B record will
change. This can be found in IRS Pub 1220.
The 2021 Maryland record layout is the only acceptable format for both current and back-
year tax magnetic media submissions.
1099 Filers must include the required Central Registration Number in positions 715 –
722 of the modified “B” record prior to submission of magnetic media to Comptroller,
State of Maryland or file submission to IRS Combined Federal/State filing program.
Note: Maryland only requires a 1099-MISC and 1099-NEC from the payee (or
employer) when there is Maryland withholding greater than zero.
• Do not include more than one “IRSTAX ” file per diskette or CD.
• 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)
“B” Record Modified for Maryland Reporting
FIELD FIELD NAME FIELD FIELD TYPE FIELD DESCRIPTION
POSITION LENGTH
1-700 Same as IRS 700 ALPHA NUMERIC Required. Same as IRS.
701-712 Maryland State Pickup 12 NUMERIC For use by Maryland State
Retirement System. Right
justify and fill with zeros.
713-714 Filler 2 ALPHA NUMERIC Maryland does not use this
field.
715-722 Maryland Central 8 NUMERIC Required. Eight-digit
Registration Number Maryland Central
Registration Number (Tax
Withholding Account
Number)
723-734 Maryland State Income 12 NUMERIC Required.
Tax Withheld Total of state and local
taxes withheld must be
added together.
Do not report separately.
Right justify and fill with
zeroes
735-746 Filler 12 ALPHA NUMERIC Maryland does not use this
field.
747-748 Combined 2 NUMERIC Constant “24” for Maryland.
Federal/State Code
749-750 Same as IRS 2 ALPHA NUMERIC Required. Same as IRS.
750
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Frequently Asked Questions
What is the Maryland Central Registration number?
The Central Registration number is an eight-digit number assigned by Maryland when
you open a state withholding account.
How can I confirm an employer’s Maryland Central Registration number?
You may contact Taxpayer Service by telephone at 410-260-7980 from Central Maryland,
or 1-800-638-2937; by e-mail at taxhelp@comp.state.md.us. Be prepared to provide the
following information: Federal Employer Identification Number (FEIN), name of
company, as well as name and phone number of the person inquiring.
Who can file paper information returns?
Employers having less than 25 1099s to submit may send a paper Form MW508 with
paper copies of the 1099s to:
Revenue Administration Division
ATTN: Returns Processing, Room 206
110 Carroll Street
Annapolis, MD 21411-0001
Can I file my corrections on magnetic media?
No, we cannot process corrected or amended 1099s and MW508s on magnetic media. All
corrected and amended 1099s and MW508s must be submitted on a paper MW508A to
the address above.
What if I file both paper returns and magnetic media?
All paper 1099s not included on media must be submitted together in one package with
the media. Also, include Form MW508 showing the totals of only paper 1099Rs and
payment of balance due, if applicable. Do not duplicate information between media and
paper. Please be sure your name, Federal Employer Identification Number, and Maryland
Central Registration number are on all documents. Send the package to the following
address:
Revenue Administration Division
Attn: Magnetic Media Unit, Room 214
110 Carroll Street
Annapolis, MD 21411-0001
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Am I required to submit a test file?
No, test files are not required, but are encouraged. We do recommend and encourage
filers to submit a test file on CD or diskette. This will validate proper format and identify
problems before the returned is filed, avoiding delays in processing. Please clearly mark
your media as “Test” and send to the address listed above.
Is there a filing deadline?
The filing deadline for submitting the MW508 return and 1099s is January 31st. If the due
date falls on a Saturday, Sunday or legal holiday, the statements must be filed the next
business day.
Can I file back-year data on magnetic media?
Yes. Maryland can process all back-year data submitted on magnetic media. All data must
be presented in the current year format and the tax year must be properly entered in the
“A” record.
Do you return the media after you are done?
No. Magnetic media becomes the property of the Revenue Administration Division and for
security purposes it is destroyed after being successfully processed.
How do I request a waiver of the Magnetic Media/Electronic filing requirement?
To request a waiver of the minimum filing threshold, you should send a written request
stating the nature of the hardship. The request should be sent by mail to the address
below. You may prefer to email efil@comp.state.md.us or fax at 410 974-2274.
Will I be penalized for not filing electronically or by magnetic media when
required?
Employers failing to file electronically (with 25 or more 1099s) may incur a penalty of
$100 for each violation. Each 1099 submitted that is not properly filed is a separate
violation subject to the above penalty. Failure to comply with Section 13-706 of the Tax
General Article, Annotated Code of Maryland may result in the assessing of additional
penalties.
Where do we send the magnetic media?
Revenue Administration Division
ATTN: Magnetic Media Unit, Room 214
110 Carroll Street
Annapolis, MD 21411-0001
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