Is It Legal to Email W-2 Forms to Employees?

Employers are required to provide employees with Form W-2, Wage and Tax Statement, which details annual wages and taxes withheld. This document is essential for employees to accurately file their federal, state, and local income tax returns. While traditionally furnished in paper format, employers now have the option to deliver W-2 forms electronically, subject to specific Internal Revenue Service (IRS) regulations. This electronic delivery method can offer efficiency for both employers and employees when properly implemented.

IRS Requirements for Electronic W-2s

Before an employer can legally provide W-2s electronically, the IRS mandates that certain foundational rules and conditions are met. A primary requirement is obtaining explicit, affirmative consent from each employee. This consent must be provided electronically in a manner that demonstrates the employee can access the W-2 in the electronic format in which it will be furnished.

Employers must provide specific disclosures to employees before obtaining consent. These include informing employees that a paper W-2 will be provided if consent is not given or withdrawn. Employers must also outline hardware and software requirements, W-2 accessibility duration, and the procedure for updating contact information. The scope, duration of consent, and conditions for ceasing electronic W-2s, such as employment termination, must also be clearly communicated.

Robust security measures are necessary to protect sensitive employee data when furnishing W-2s electronically. This includes implementing encryption, secure access protocols, and measures to ensure data integrity. Protecting against unauthorized access to confidential wage and tax information is important to comply with IRS guidelines.

Employees must have the ability to readily access, print, and retain their electronic W-2s in a usable format. The W-2 should be in a format that can be easily opened and printed, and employees must have access to the necessary technology. The IRS encourages electronic filing for employers.

Delivering W-2s Electronically

After meeting IRS requirements, employers can proceed with electronic delivery. Common methods include secure online employee portals or highly secure email systems. For online portals, employees typically log in using unique credentials to retrieve their forms, offering a controlled and secure environment.

When using email for delivery, simply attaching a W-2 to a regular email is insufficient due to security risks. Instead, employers must employ strong security measures such as password-protected PDF files, secure download links that direct employees to a secure portal, or utilizing encrypted email services. The aim is to ensure the confidentiality and integrity of the sensitive tax information during transmission.

If an employee does not provide consent for electronic delivery, or if they later revoke their consent, the employer is obligated to provide a paper W-2. This paper form must be mailed to the employee’s last known address by the annual deadline, typically January 31st of the following year. Employers must adhere to this requirement to remain compliant with IRS regulations, ensuring all employees receive their necessary tax statements.

Maintaining Compliance for Electronic W-2s

Ongoing responsibilities extend beyond the initial electronic delivery to ensure continuous compliance with IRS regulations. Employers must maintain accurate records of employee consent for electronic delivery, as well as any subsequent withdrawals of consent. These records should be retained for at least four years after filing the fourth quarter for the tax year to be available for IRS review.

Employers must ensure employees can continue to access their electronic W-2s for a specified period, even after employment ends. This allows former employees to retrieve tax documents as needed for future tax filings. For W-2s posted on a website portal, the IRS generally requires accessibility for several months after the due date.

A clear process for employees to update contact information or change consent preferences is necessary. This ensures electronic W-2s are delivered to the correct address and employees can manage delivery preferences. Should an employee request a paper W-2, even after previously consenting, the employer must provide it. This upholds the employee’s right to a paper copy upon request.