If you employ others at your New York City business, you have obligations regarding their federal and state withholdings, as well as wages that can be taxed. The W-2 form is an important document that you will need to supply to your employees when they begin employment, and it also comes into play at the end of the year.
What is the W-2 form? The Internal Revenue Service uses this form to keep track of wages earned during the calendar year. When they first start their job, your employees will fill it out with information such as their address, Social Security number, number of household dependents they wish to claim and their salary. At the end of the year, they receive the form from your company that details how much money they made that year, as well as the taxes that were withheld from their paychecks.
Your employees must have their W-2 forms for the previous year by the end of January – for example, they should receive their 2015 W-2s by January 31, 2016. You have the option of sending a W-2 either by regular mail or digitally. If an employee only worked the last few weeks of the previous year, you should still send them a W-2 form for those weeks they were employed by you.
To avoid legal consequences and make it easier if you are in an audit, you must keep all employees’ W-2 forms on record for four years or longer. By complying with the IRS’s tax regulations, you are protecting your business’s best interests. This information should not be substituted for legal advice.