What should be done with the contractor's copy of an employee's Form W-2?

What should be done with the contractor's copy of an employee's Form W-2?

• A. File the copy in the contractor's office
• B. Mail to the employee
• C. Shred after year-end
• D. Store with payroll records

Answer: (A)

The key idea is keeping proper payroll records for tax and audit purposes. The contractor’s copy of the employee’s Form W-2 is the employer’s record of wages and withholdings, so it should be filed with the contractor’s payroll records in the office. This creates an accessible, organized ledger that can be referenced if questions come from the IRS or Social Security Administration, and it supports the required retention period (typically several years). Mailing the copy to the employee would provide the employee with their copies, not the employer’s record. Shredding it would discard important documentation, and while storing with payroll records is related, the formal action is to file the copy in the office so it remains part of the official payroll file.

The key idea is keeping proper payroll records for tax and audit purposes. The contractor’s copy of the employee’s Form W-2 is the employer’s record of wages and withholdings, so it should be filed with the contractor’s payroll records in the office. This creates an accessible, organized ledger that can be referenced if questions come from the IRS or Social Security Administration, and it supports the required retention period (typically several years). Mailing the copy to the employee would provide the employee with their copies, not the employer’s record. Shredding it would discard important documentation, and while storing with payroll records is related, the formal action is to file the copy in the office so it remains part of the official payroll file.