Tax Income

Tax Reporting Requirements for Payroll and Employee Compensation

Requirement	Description	Frequency
Form W-2	Employers must report employees' annual wages and taxes withheld on Form W-2 and provide copies to employees and the Social Security Administration (SSA).	Annual
Form 940	Used to report and pay federal unemployment taxes (FUTA). Required for employers who pay wages subject to FUTA tax.	Annual
Form 941	Employers use this form to report income taxes, Social Security tax, and Medicare tax withheld from employee paychecks, plus the employer's share of Social Security and Medicare tax.	Quarterly
State Payroll Tax Reports	Employers may need to report state income tax withholding, unemployment insurance contributions, and other state-specific payroll taxes on state forms.	Varies by State (Typically Monthly or Quarterly)
Form 1099-NEC	Used to report compensation paid to independent contractors or non-employees for services rendered.	Annual
Form W-4	Employees must complete Form W-4 to determine the amount of federal income tax to withhold from their paychecks.	Upon Hire or When Withholding Changes
Form I-9	Employers must verify employee eligibility to work in the U.S. using Form I-9 and retain the form for their records.	Upon Hire
Payroll Records Retention	Employers are required to keep payroll records, including tax filings, wage statements, and withholding records, for a specific period (typically 4 years).	Ongoing
Filing and Depositing Payroll Taxes	Employers must deposit withheld federal income tax, Social Security tax, and Medicare tax according to deposit schedules (monthly, semi-weekly, or next-day depending on the amount).	Varies (Monthly, Semi-Weekly, or Next-Day)