9 IRS Payroll Forms for Small Business

Managing payroll for a small business involves a variety of IRS forms to ensure compliance with federal regulations. These forms help businesses report wages paid to employees, tax withheld, and other relevant payroll information. Here’s a comprehensive guide to the nine essential IRS payroll forms every small business owner should know about.

Form W-2

Purpose: Form W-2, Wage, and Tax Statement, reports an employee’s annual wages and the taxes withheld from their paycheck.

Who Needs It: Every employer must file a Form W-2 for each employee to whom they pay a salary, wage, or other compensation.

Key Details:

  • Deadline: Employers must provide Form W-2 to employees by January 31st and file it with the Social Security Administration (SSA) by the same date.
  • Information Included: Employee’s total earnings, Social Security and Medicare wages, and federal and state taxes withheld.

Form W-3

Purpose: Form W-3, Transmittal of Wage and Tax Statements, is a summary of all W-2 forms issued by an employer.

Who Needs It: Employers who file one or more W-2 forms.

Key Details:

  • Deadline: Filed with the SSA by January 31st.
  • Information Included: Total wages, tips, other compensation, and the total taxes withheld as reported on the W-2 forms.

Form 940

Purpose: Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return, reports federal unemployment taxes.

Who Needs It: Employers who pay wages of $1500 or more in any calendar quarter or have one or more employees for at least part of a day in 20 or more different weeks in the calendar year.

Key Details:

  • Deadline: Due by January 31st, with an extended deadline of February 10th if all taxes have been deposited on time.
  • Information Included: Total payments to employees, payments exempt from FUTA tax, and the amount of FUTA tax owed.

Form 941

Purpose: Form 941, Employer’s Quarterly Federal Tax Return, reports income taxes, Social Security tax, and Medicare tax withheld from employees’ paychecks.

Who Needs It: Most employers are required to file Form 941.

Key Details:

  • Deadline: Filed quarterly, with deadlines on April 30th, July 31st, October 31st, and January 31st.
  • Information Included: Wages paid, tips reported, federal income tax withheld, and the employer’s share of Social Security and Medicare taxes.

Form 944

Purpose: Form 944, Employer’s Annual Federal Tax Return, is designed for smaller employers to report employment taxes on an annual basis instead of quarterly.

Who Needs It: Employers with an annual tax liability of $1,000 or less for Social Security, Medicare, and withheld federal income tax.

Key Details:

  • Deadline: Filed annually by January 31st.
  • Information Included: Similar to Form 941, but filed once a year.

Form 1095-B

Purpose: Form 1095-B, Health Coverage, reports information about individuals who have minimum essential coverage under the Affordable Care Act (ACA).

Who Needs It: Insurers, employers who offer self-insured health plans, and other providers of health coverage.

Key Details:

  • Deadline: Provided to employees by January 31st and filed with the IRS by February 28th (paper) or March 31st (electronically).
  • Information Included: Covered individuals and the months they had coverage.

Form 1094-B

Purpose: Form 1094-B, Transmittal of Health Coverage Information Returns, accompanies Form 1095-B as a summary transmittal form.

Who Needs It: Entities are required to file Form 1095-B.

Key Details:

  • Deadline: Same as Form 1095-B, with paper filings due by February 28th and electronic filings by March 31st.
  • Information Included: Summary of all 1095-B forms submitted.

Form 1095-C

Purpose: Form 1095-C, Employer-Provided Health Insurance Offer and Coverage provides information about health insurance coverage offered to employees.

Who Needs It: Applicable large employers (ALEs) with 50 or more full-time employees.

Key Details:

  • Deadline: Provided to employees by January 31st and filed with the IRS by February 28th (paper) or March 31st (electronically).
  • Information Included: Details of the health insurance offered, the employee’s share of the cost, and coverage dates.

Form 1094-C

Purpose: Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns is a transmittal form for Form 1095-C.

Who Needs It: ALEs are required to file Form 1095-C.

Key Details:

  • Deadline: Same as Form 1095-C, with paper filings due by February 28th and electronic filings by March 31st.
  • Information Included: Summary of all 1095-C forms submitted, including employer details and certifications of eligibility.

Additional Payroll Forms

In addition to the nine essential forms, there are other payroll forms small businesses might need.

Form W-4

Purpose: Form W-4, Employee’s Withholding Certificate, determines the amount of federal income tax to withhold from an employee’s paycheck.

Who Needs It: Every employee must complete Form W-4 when starting a new job or when their personal or financial situation changes.

Key Details:

  • Information Included: Personal information, filing status, and any additional withholding amounts or deductions.

Other Forms

Purpose: Other forms may be required depending on specific circumstances, such as hiring independent contractors or dealing with specific types of compensation.

Examples Include:

  • Form 1099-NEC: For reporting nonemployee compensation.
  • Form I-9: For verifying an employee’s eligibility to work in the United States.
  • State-Specific Forms: Each state may have its payroll tax forms and requirements.

Managing payroll and understanding the required IRS forms can be complex, but staying informed and organized can help small businesses ensure compliance and avoid penalties. Regularly reviewing IRS guidelines and consulting with a payroll specialist or accountant can provide additional support.