United States6 min readSources: IRS

US year-end payroll checklist: W-2s, 1099s, 940 and 941 for small employers (2026 → 2027)

Short answer

Before the last payday of 2026, check names, SSNs and addresses, settle bonus and fringe benefit timing, and reconcile year-to-date totals with your Forms 941. In January, give W-2s and 1099-NECs and file them, plus Forms 941 and 940, by February 1, 2027. Then load 2027 rates before the first payday.

Enter the year's totals and get Copies B, C and 2 to hand out by February 1.

Make W-2 employee copies

Published November 10, 2026 · Approved by PayDocs, November 10, 2026 · How we check facts

Photo by Olga DeLawrence on Unsplash

Year end is when small payroll mistakes become W-2 corrections. This checklist runs in the order the work happens, from early December to mid-February, for a US employer with a handful of employees. The dates are for 2026 wages filed in 2027.

Running payroll in the UK? The UK tax year ends on 5 April; see our UK payroll year-end checklist instead.

Early December: check the data the W-2 will use

Names and Social Security numbers exactly as on each employee's Social Security card. SSA rejects wage reports with certain name and SSN errors, according to the IRS W-2 instructions.
Current mailing addresses. A W-2 is furnished on time if it's properly addressed and mailed by the due date, so an old address costs you a resend.
Form W-4 changes for 2027. Remind employees that a new W-4 takes effect for future paydays. Anyone who claimed exemption from withholding for 2026 must give you a new W-4 by February 15, 2027 to stay exempt; otherwise Publication 15 says to withhold as if they checked Single or Married filing separately with no other entries.
Employees who left during the year: confirm their final addresses for the W-2.

December paydays: bonuses and fringe benefits

Wages count in the year they're paid, not the year they're earned. A bonus paid on December 31, 2026 goes on the 2026 W-2; the same bonus paid on January 2, 2027 goes on the 2027 one. Decide the pay date on purpose, and check whether a large bonus takes anyone past the $184,500 Social Security wage base or the $200,000 Additional Medicare Tax threshold.

Add taxable fringe benefits to wages before the final payday: personal use of a company car, group-term life insurance over $50,000, gift cards and similar items. Publication 15-B's special accounting rule lets you treat noncash benefits provided in November and December as paid in the next year, if you use the rule consistently and tell employees.

After the last payday: reconcile

Add up each employee's year-to-date wages, federal income tax, Social Security and Medicare from the final 2026 pay stub.
Total the four 2026 Forms 941. Social Security wages, Medicare wages and federal withholding on the four returns should equal the W-2 totals that will go on Form W-3.
Compare state withholding and state wages with your state returns for the year.
Fix differences now with a Form 941-X or a corrected pay record, not after the W-2s are out.

January: forms and deadlines

Federal year-end forms for 2026 wages (IRS instructions for each form)
Form	Who gets it	Due date
Form W-2	Employees (Copies B, C and 2) and SSA (Copy A)	February 1, 2027 for both
Form W-3	SSA, with paper W-2s; e-filing through SSA's Business Services Online creates it for you	February 1, 2027
Form 1099-NEC	Contractors paid $2,000 or more in 2026, and the IRS	February 1, 2027 (January 31 is a Sunday)
Form 941, fourth quarter	IRS	February 1, 2027; February 10 if every 2026 deposit was made on time
Form 940 (FUTA)	IRS	February 1, 2027; February 10 if all FUTA tax was deposited when due

The $2,000 threshold for Form 1099-NEC is new for payments made after 2025: Public Law 119-21 raised it from $600, according to the IRS instructions for Forms 1099-MISC and 1099-NEC. If you file 10 or more information returns in total, counting W-2s and 1099s together, you must e-file them.

When W-2s are due, and what happens if you're late Form 940 and FUTA, explained

State year-end filings

Most states with an income tax want an annual withholding reconciliation and copies of the W-2s, and every state wants the fourth-quarter unemployment insurance report. Deadlines and portals differ by state, so check your state revenue and labor department sites in December and put the dates in the same calendar as the federal ones. Several states also send new unemployment insurance rates for 2027 around the turn of the year.

Before the first 2027 payday: new rates

The 2027 Social Security wage base, announced by SSA in October. Reset year-to-date Social Security wages to zero.
State minimum wage increases on January 1, 2027, and any exempt salary thresholds tied to them.
Your 2027 state unemployment insurance rate, from your state's rate notice.
Employees' new W-4s and state withholding forms received in December or January.

Keep the records

Publication 15 says to keep all employment tax records for at least 4 years, available for IRS review. That includes copies of W-2s and W-3, the four Forms 941, Form 940, W-4s and the pay records behind them. Some states ask for longer.

How long to keep payroll records

Where PayDocs fits

PayDocs doesn't file Forms W-2, W-3, 941, 940 or 1099 with any agency. It makes the documents you hand out: pay stubs with year-to-date totals through the last payday, and W-2 employee copies from those totals. PayDocs works out federal income tax, Social Security, Medicare and supported state taxes for 2026 pay dates (see what we calculate). You still file Copy A with SSA yourself.

This is general information, not legal or tax advice. Rules change and have exceptions; the agency linked in each row has the official version.

UK readers: payroll year-end checklist for the April year end See prices

Questions

When are W-2s due for 2026 wages?

February 1, 2027, both to employees and to the Social Security Administration. January 31, 2027 is a Sunday, so the IRS W-2 instructions give February 1. Paper and electronic filing have the same deadline.

Does a bonus paid on December 31 count for this year?

Yes. Wages are reported in the year they're paid. A bonus paid on December 31, 2026 goes on the 2026 W-2; paid in January 2027, it goes on the 2027 W-2 and uses 2027 limits.

Do I have to e-file W-2s?

Yes, if you file 10 or more information returns in total for the year, counting W-2s and Forms 1099 together. Below that you can file paper Copy A with Form W-3, though SSA encourages e-filing.

How long should I keep payroll records?

At least 4 years for federal employment tax records, according to IRS Publication 15. Keep W-4s, pay records, Forms 941 and 940, and copies of W-2s and W-3. Some states require longer.