Employers need to follow W2 record retention guidelines to remain in good standing with the Internal Revenue Service. As tax season approaches, you may need a reminder about all the retention guidelines for your tax forms.
In the event that the IRS requests old tax records or you need to produce them for employees, you will want a system in place to neatly house the forms. You may be interested in a software solution that also stores and organizes all of the files that you must retain. Our W2/1099 Forms Filer base program is a quality tax software solution for form storage.
Why Do Employers Retain W2 Forms?
Employers file a W2 tax form for employees on their payroll during each tax season. Employers file the original form with the IRS and generate two copies of the form:
- One form goes to the employee
- One form stays in the employer’s files
Employers can electronically file the W2 forms. In these instances, they save a digital copy of the form for their records. An employee may request a physical copy of their year-end W2, so employers need to be able to generate both an electronic and physical version of the form.
Employers must retain tax records for at least four years after the last filing for a quarter.
Within the appropriate 2025 period of limitations, there are two main reasons why employers need to retain W2s. These reasons are:
- The IRS might need to assess additional taxes
- You or your employees might need to amend the tax return and request a refund or tax credit
The IRS or employees may request these at any time within the period of limitations. Although how long you should keep a document does depend on the action, expense, or event that the recording details, you must be able to produce the forms under any mandated circumstances.
What Information Do Employers Need to Retain?
Employers need to retain an employee’s information and their tax forms. Appropriate information that your business should hold onto includes an employee’s:
- Wages
- Contact information
- Social Security number
- Sick pay
Employers should additionally keep copies of all income reporting tax forms, mainly the W2. There are certain instances when W2 forms may return to you as undeliverable. Employers should keep any forms like these in their records as well.
People Also Ask
- Do W2 forms need to be printed to count as records? – No, your W2 forms can exist as electronic copies as long as you make sure that they are easily accessible, secure, and accurate.
- Do I need to request permission to electronically store an employee’s W2 form? – No, you are only required to obtain consent when you want to deliver electronic W2 forms. Internal storage can be done at your discretion with the proper security safeguards.
How AMS Software Helps with W2 Record Retention Guidelines
You may feel overwhelmed with the prospect of following the W2 record retention guidelines if you do not have a storage system in place. Consider our W2/1099 tax software to establish a filing and storage solution that satisfies record retention guidelines.
The W2/1099 base software package can create files that you can export and later encrypt to protect sensitive identifying information like SSNs throughout the retention period. Additionally, you can establish individual employee files. Make it easier for you to produce any files that the IRS or employees might request.
Customizing your software might look like adding on other software tools, like an E-Filer, which enables you to electronically file W2 forms to the IRS. Need additional support? Download our free 1099-etc Demo software and see how our add-on modules can accommodate your needs. Now is a great time to take stock in your tax form system. Invest in W2 support and streamline your filing and storage setup.