In addition to your obligation to file payroll tax returns with your taxing authorities, you have a reporting obligation to your employees. In essence, you must tell the employees how much you paid them in taxable compensation and how much you withheld from their wages for federal and state income taxes and FICA taxes.
For federal tax purposes, you make the report by providing each employee a Form W-2, Wage and Tax Statement.
Distributing W-2s. You must provide a Form W-2 to each employee who works for you during the calendar year. The W-2s must be distributed by January 31 of the year following the calendar year covered by the form. However, employees who were terminated during the course of the year may request that you provide their W-2s at an earlier date. When a terminated employee requests the W-2s earlier, you must furnish the forms within 30 days of the request or, if later, within 30 days of your last payment of wages to the employees. If for any reason you're unable to distribute a W-2 to an employee, you should retain the undeliverable form as part of your records.
Filing W-2s. You must file by the end of February copies of your employees' W-2s with the Social Security Administration (SSA). In transmitting the forms, you should file Form W-3, Transmittal of Wage and Tax Statements.
Correcting W-2s. If you have the need to correct or replace a W-2 that you've distributed to an employee or filed with the SSA, use Form W-2c, Statement of Corrected Income and Tax Amounts.
Independent contractors. You don't provide W-2s to your independent contractors, because you generally don't withhold or pay any payroll taxes with respect to them. However, you are required to file a federal information return (Form 1099-MISC) for any independent contractor to whom you've paid at least $600 as compensation for services. Copies of the return must be provided to the contractors by January 31, and to the IRS by February 28.
State reporting. Click on your state on the map below for general information about the employee reports, and any information returns for independent contractors, that the state requires you to prepare. The nine states that are unshaded are states that do not impose a personal income tax.