To fight tax fraud, many states have accelerated the filing deadline for employers to file Forms W-2, says APA Director of Publications Laura Lough, Esq. Eleven states, as well as the Commonwealth of Puerto Rico, require employers to file W-2 forms electronically or on magnetic media by January 31. Nebraska will have a filing deadline of February 1.
As you will recognize, this is a significant change. More and more states are taking another action to fight tax fraud: delaying personal income tax (PIT) refunds to taxpayers. Sometimes employees file early hoping to get a refund faster. They may use information from a final paycheck to complete their PIT returns, rather than wait for a Form W-2 (due to employees January 31). Says Lough, “This is not a recommended practice as a final paycheck may not have all the necessary information that a Form W-2 will have”.
South Carolina and Utah have both indicated that they will delay personal income tax refunds to taxpayers in order to minimize fraud. The delay gives the states the time to verify employer filings of W-2 Forms against taxpayer returns. In some cases, the states will pair this action with an accelerated employer filing deadline for W-2 Forms, making that date January 31, instead of February 29 (this year’s deadline) for paper forms and March 31 for e-filing.
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