April 25, 2014

Employer's Federal Recordkeeping Requirements

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On December 22, 2017, The Tax Cuts and Jobs Act was signed into law. The information in this article predates the tax reform legislation and may not apply to tax returns starting in the 2018 tax year. You may wish to speak to your tax advisor about the latest tax law. This publication is provided for your convenience and does not constitute legal advice. This publication is protected by copyright.

Employer's Federal Recordkeeping Requirements

Under IRS regulations, employment tax records must be maintained for at least four years after the later of the due date of the tax for the return period to which the records relate, or the date the tax is paid. The records should include the following information:

Employer identification number (EIN);
Amounts and dates of all wage, annuity and pension payments;
Amounts of tips reported;
The fair market value of in-kind wages paid;
Names, addresses, Social Security numbers and occupations of employees and recipients;
Employee copies of Form W-2s that were returned as undeliverable;
Dates of employment;
Periods for which employees and recipients were paid while absent due to sickness or injury, and the amount and weekly rate of payments made to them by the employer or third-party payers;
Copies of employees' and recipients' income tax withholding allowance certificates (Forms W-4, W-4P, W-4S and W-4V);
Dates and amounts of tax deposits;
Copies of returns filed;
Documentation for allocated tips; and
Documentation for fringe benefits provided, including substantiation.

A willful failure to keep required records is a misdemeanor punishable by a fine of up to $25,000 ($100,000 for corporations) and/or imprisonment for up to one year.

If you need assistance organizing your records and have further questions related to your recordkeeping requirements, please give us a call.