Many employers forget or are unaware there are employee forms and records they must 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: a 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 could not produce a Form I-9, they could receive a penalty 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.
Regarding the W-4 and NYS IT-2104, an employee could be subject to a $500 penalty if they submit a Form W-4 with less tax being withheld than is required. Employers must keep the employees’ W-4s in their records for at least four years. This form verifies that the employer withholds federal income tax according to the employee’s instructions. These forms and 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 report the new hire to NYS by mailing or faxing the NYS IT-2104 form or 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 get in touch with Gleason Tax Advisory at 716-720-5339. Learn more about our payroll services.