Friday, October 9, 2015

State Trend to Accelerate W-2 Filing Deadlines

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There is a state trend to accelerate the filing deadlines of Forms W-2 and annual reconciliation returns.

Employers need to be aware of these earlier deadlines because there are penalties for noncompliance.

State officials believe an earlier filing deadline will allow them to better combat tax return fraud. The idea is that state tax departments will be able to identify fraudulent returns before refunds are issued. The early due date is January 31, although most states still have a deadline for W-2 forms to be filed electronically or on magnetic media by February 28 or the last day of February.

Connecticut recently became the latest state to move up its filing deadline. The 2015 Forms CT-W3 (annual reconciliation return) and Forms W-2 will be due to the Connecticut Department of Revenue Services by January 31. Previously, the due date was March 31.

In addition to Connecticut, three other states have moved up their deadlines to January 31, effective for W-2 forms filed in 2016: Alabama, Indiana, and Utah. Plus, it is possible North Carolina will join this list soon. North Carolina legislature is considering S.B. 605, which would accelerate the Forms W-2 filing deadline to January 31 for 2015 forms due in 2016. The bill passed the North Carolina Senate on July 23 and is being considered in the House of Representatives.

There is also a federal proposal seeking to accelerate the Forms W-2 filing deadline to January 31 from the last day of February (March 31 for electronic filing). This would give these states a head-start on compliance with federal legislation.

Read PayState Update: Issue No. 18, Vol. 17 for more information on states that are accelerating their W-2 filing date.