Federal Payroll Tax and Information Return Filing Requirements

Author: Vicki M. Lambert, CPP

The Internal Revenue Service (IRS) and the Social Security Administration (SSA) require all employers to file certain payroll tax and information returns on a quarterly or annual basis by certain deadlines.

The information an employer reports on these returns is used by the IRS, the SSA and state and local tax agencies to determine whether the employer has withheld from each employee's pay (and deposited) the required federal income tax (FIT), state and local income taxes, and employment taxes (i.e., Social Security and Medicare (FICA) tax). While an employer must pay Federal Unemployment Tax (FUTA), it is not withheld from an employee's pay. An employer (as a payor) also uses certain returns to report to these agencies any payments made to nonemployees, such as independent contractors, for services performed.

An employer is also required to give various copies of information returns to every employee (i.e., Form W-2, Wage and Tax Statement) and, as a payor, to every independent contractor or other nonpayroll payee (i.e., 1099 series forms) by certain deadlines. An employee must attach the appropriate copy of Form W-2 to their federal income tax return; a recipient of a 1099 does not attach a copy of the form to their federal income tax return. An employer/payor must also provide copies of these forms for employees and independent contractors to save for their own records.

An employer can file most tax and information return forms with the taxing agencies electronically or by mailing completed paper forms. However, beginning with calendar year 2023 information returns filed in 2024, employers filing 10 or more information returns must file electronically. In addition, to determine whether the 10-form threshold is met, an employer must add together all the information returns it is required to file.

If an employer is required to file original returns electronically, it must also file any corrected returns electronically. An employer may be required to use specific forms any time it needs to correct errors made on previously filed returns. Some forms contain checkboxes at the top for a payor to indicate to the IRS that the form is a corrected return.

The following chart summarizes the requirements for an employer/payor to properly complete and timely file the quarterly and annual federal payroll tax and information returns required by the IRS and SSA, as well as to timely provide the correct copies of information returns to the appropriate recipients. The chart also summarizes how an employer can correct errors on a previously filed return. Chart cells for which there are no employer requirements are marked "N/A".

For ACA information-reporting requirements pertaining to the 1094 and 1095 series forms, see:

• Taxation of Employee Benefits: Federal;
• How to Complete and File Forms 1094-B and 1095-B for ACA Information-Reporting Purposes;
• How to Complete and File Forms 1094-C and 1095-C for ACA Information-Reporting Purposes; and
• ACA Information-Reporting Requirements.