Many employers forget or simply are unaware there are employee forms and records they need to keep on record to avoid unnecessary penalties. There are several forms employees need to complete for employers. An employer should have the following forms and information in each employee’s file: copy of their driver’s license, an I-9 form (kept together with other employee’s I-9s), a W-4 and an IT-2104, if the business is in NYS.
There can be unnecessary penalties for not keeping these forms in a business owner’s files. If an employer were to be audited and was not able to produce a Form I-9, they could receive a penalty anywhere between $230 to $2,292 per violation of Federal regulations. An employer must retain a Form I-9 from each person hired for three years after the date they were hired, or one year after the date employment ends, whichever is later. Be sure to keep all I-9 forms together in one file as they would need to be produced immediately following a request from a government official.
In regards to the W-4 and NYS IT-2104, an employee could actually be subject to a $500 penalty if he or she submits a Form W-4 that has less tax being withheld than is required. Employers must keep the employees’ W-4s in their records for at least 4 years. This form serves as verification the employer is in fact withholding federal income tax according to the employee’s instructions. These forms, along with the I-9, need to be available for an IRS inspector if they ever request them.
In addition, if you have a new employee, please be sure to report the new hire to NYS by mailing or faxing in the NYS IT-2104 form or by creating a New York State New Hire Reporting account via the tax.ny.gov website. Their fax number is: 1-518-320-1080 and the mailing address is: New York State Dept. of Taxation and Finance, New Hire Notification, PO Box 15119, Albany, NY 12212-5119.
If you have any questions or concerns about whether you are keeping adequate records and files on your employees, please contact Janine at 716-720-5339 or firstname.lastname@example.org.