• Employers should follow the basic recordkeeping requirements for federal tax and wage reporting compliance among other mandates.

Below are the basic requirements for federal tax and wage reporting compliance:

• Determine employee status, verify work eligibility by filing Form I-9.
• File Form 941 quarterly, and Form 940 annually. Send in Forms W-4 each quarter with Form 941 when the employee claims more than 10 withholding allowances, or exemption from withholding, and the employee’s wages would normally be more than $200 per week.
• Other forms may also be required (e.g., Form 943 for agricultural labor).
• File Form(s) W-2 (Wage and Tax Statement).
• File Form(s) W-3 (Transmittal of Wage and Tax Statement).
• File Form 945 (Annual Return of Withheld Federal Income Tax).
• File Form 1096 (Annual Summary and Transmittal of U.S. Information Returns).
• 1099 Forms — For certain types of income, a Form 1099 must be used with the federal tax return. Employers will not usually attach a 1099 series form to the return, except when receiving a Form 1099-R that shows income tax withheld. Keep all other 1099s with tax records. There are numerous 1099s.
• File Form 8027 (Employer’s Annual Informational Return of Tip Income and Allocated Tips).
• Check for required information returns and file those that apply to the company.
• Complete Form W-5 (Earned Income Credit Advance Payment Certificate). This form is retained by the employer.
• Determine business tax and wage reporting records to be kept, determine period to be kept, and maintain records.

States may also have additional employer reporting requirements.