A new IRS bulletin allows employees to receive W-2 forms electronically via an e-mail attachment or a secure website. We’ll go over the key rules you need to know.
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Electronic W-2 Delivery
- Employee consent needed. Employees must agree to receive their W-2s in an electronic format. Consent may be given electronically or on paper, in a way that demonstrates the employee will be able to access the electronic W-2 statement. Use the same process to gain the employee’s consent that you’ll employ to provide the W-2s. For example, you can:
- Send employees a consent letter instructing them to access a secure website, download the consent document, complete the consent document, and e-mail it back to you.
- Send employees an e-mail with an attachment telling them how to receive W-2 statements electronically. The employees open the attachment, read the instructions, and submit consent in the manner indicated.
- Post a notice on your website with instructions on how employees may access a secure webpage where they can consent to receive W-2 statements electronically.
- Disclosures required. Before or at the time of employees’ consent, you must provide a clear and conspicuous disclosure statement that contains the following:
- A statement that the W-2 will be provided on paper if the employee doesn’t consent to receive it electronically.
- The scope and duration of the consent. For example, does consent apply to W-2s for every year until consent is withdrawn or only to the year right after consent is given?
- The procedure for obtaining a paper copy of the recipient’s W-2 after giving consent, and whether a request for a paper W-2 is treated as a withdrawal of consent.
- The procedure for withdrawing consent.
- The conditions under which you will stop providing statements electronically.
- The procedures for updating the information you need to contact the recipient.
- A description of the hardware and software required to access, print, and retain the W-2 statements.
- A statement that the W-2 will be available on the website through Oct. 15.
- Withdrawal of consent. The consent requirement is not satisfied if the employee withdraws consent before the W-2 is furnished. You can provide that a withdrawal of consent takes effect either on the date the withdrawal is received or on a later date. You may specify that a request for a paper statement will be considered a withdrawal of consent.
- Change of hardware or software systems. If a change in your hardware or software systems creates a risk that recipients won’t be able to access their statements, you must notify them before the change and inform them that a new consent will be necessary. After the change, you need to obtain a new consent from each affected employee.
- Format of electronic statements. The electronic W-2 must contain all required information and comply with applicable procedures for providing substitute statements to recipients.
- Notice. You must notify recipients when the W-2 is posted on a website. The notice may be delivered by mail, e-mail, or in person. It must tell how to access and print the statement and must include the following statement in capital letters: “IMPORTANT TAX RETURN DOCUMENT AVAILABLE.” For an e-mail notice, this statement must be on the subject line.
- Undeliverable electronic address. If an electronic notice is returned as undeliverable and the correct electronic address can’t be obtained, you must provide the notice by mail or in person within 30 days after the electronic notice is returned.
- Access period. W-2s posted on a website must stay there through Oct. 15 of the year following the calendar year to which the statements relate.