Record Retention Requirements Under Federal, State, and District of Columbia Law

January 20, 2014

Business Law Employment Law


Listed in the tables below are company record retention requirements on the federal and state level for the mid-atlantic region.  Each table breaks down which documents are to be retained, how long employers are required to retain those documents, and under what basis according to the law.  If you have any questions regarding record retention requirements and how they apply to your business, please feel free to call our firm at (410) 832-0000.

 

FEDERAL REQUIREMENTS

 Documents Relating To:

 Years To
 Retain:
 Basis:

 Business Income Tax

 

 Internal Revenue Code, 26 C.F.R. § 1.6001-1

 Income tax returns

 Permanent

 IRS Publication 542

 Supporting documentation (documents
 showing items of income, deductions, or
 credits) depends on the applicable
 limitations period.

   IRS Publication 583
  • Additional taxes owed (most likely applicable).

 3 years

 
  • Did not report income more than 25% of the gross income shown on the return.

 6 years

 
  • Filed a fraudulent return.

 Not limited

 
  • Did not file a return.

 Not limited

 
  • File a claim for credit or refund after you filed your return. 

 Later of 3 years
 or 2 years after
 tax was paid

 
  • File a claim for a loss from worthless securities or a bad debt deduction.

 7 years  

 Employee Taxes

 4 years

 Internal Revenue Code

 IRS Recommendation:

 http://www.irs.gov/Businesses/Small-
Businesses-&-Self-Employed/
Employment-Tax-Recordkeeping

 Generally includes:

   
  • Employer identification number;
   
  • Amounts and dates of all wage, annuity, and pension payments;
   
  • Amounts of tips reported;
   
  • Fair market value of in-kind wages;
   
  • Names, addresses, social security numbers, and occupations of employees and recipients;
   
  • Any employee copies of Form W-2 that were returned as undeliverable;
   
  • Dates of employment;
   
  • Periods for which employees and recipients were paid while absent due to sickness or injury and the amount and weekly rate of payments you or third-party payers made to them;
   
  • Copies of employees’ and recipients’ income tax withholding allowance certificates (Forms W-4, W-4P, W-4S, and W-4V);
   
  • Dates and amounts of tax deposits you made;
   
  • Copies of returns filed;
   
  • Records of allocated tips;
   
  • Records of fringe benefits provided, including substantiation.
   

 Employee Information

 3 years

 Fair Labor Standards Act

 U.S. Department of Labor recommendation:

 http://www.dol.gov/whd/regs/compliance
/whdfs21.pdf
  • Employee’s full name and social security number;
   
  • Address, including zip code;
   
  • Birth date if younger than 19;
   
  • Sex and occupation;
   
  • Time and day of week when employee’s workweek begins;
   
  • Hours worked each day;
   
  • Total hours worked each workweek;
   
  • Basis on which employee’s wages are paid;
   
  • Regular hourly pay rate;
   
  • Total daily or weekly straight-time earnings;
   
  • Total overtime for the workweek;
   
  • All additions to or deductions from the employee’s wages;
   
  • Total wages paid each pay period;
   
  • Date of payment and the pay period covered by the payment.
   

 Employment Eligibility

 3 years from date
 of hire or 1 year
 from termination

 Immigration Reform and Control Act

 http://www.uscis.gov/i-9-central/i-9-central-
questions-answers/storing-form-i-9-qas
  • INS Form I-9
   

 Employee Health

 5 years after the
 period the
 records relate
 to.

 Occupational Safety and Health Act (OSHA)

 http://www.osha.gov/pls/oshaweb/
owadisp.show_document?p_table=
standards&p_id=12777

  • Log and summary of occupational injuries and illnesses, briefly describing recordable case of injury and illness, extent and outcome of each incident, and summary totals for calendar years.
   

 Retirement Benefits

 

 Employee Retirement Income Security Act
 (ERISA)

  • Records providing basis for all required plan descriptions or reports, or necessary to certify any related information, including vouchers, worksheets, receipts and applicable resolutions.

 6 years after
 filing date of
 documents.

 29 U.S.C. § 1027

  • Records pertaining to each employee-participant in the plan for determinations of benefits that are
    due or may become due.
 As long as
 relevant.
 29 U.S.C. § 1059

 Hiring, Firing, Promotion

 1 year after
 record was
 made or
 personnel
 action taken,
 which is later.

 American with Disabilities Act (ADA)

  • Any personnel or employment record made or kept by employer, including application forms and records concerning hiring, promotion, demotion, transfer, layoff, termination, rates of pay, or other terms of compensation, and selection for training or apprenticeship.
   29 C.F.R. § 1602.14

 Employment Decisions

 

 Age Discrimination in Employment Act

 http://www.eeoc.gov/employers/record
keeping.cfm
  • Payroll or other records containing each employee’s name, address,
    date of birth, occupation, rate of pay,
    and compensation earned per week.

 3 years

 
  • Personnel or employment records relating to job applications, promotion, demotion, transfer, physical exam results, and job-placement test results.

 At least 1 year
 after date of
 personnel action
 to which record
 relates.

 

 Family and Medical Leave

 3 years

 Family Medical Leave Act

 U.S. Department of Labor Recommendation:

 http://webapps.dol.gov/elaws/whd/fmla
/8b6.aspx
  • Basic payroll and identifying employee data;
   
  • Dates FMLA leave is taken by FMLA-eligible employees, including the hours of the leave, if FMLA is taken in increments of less than one full day;
   
  • Copies of employee notices of leave provided to the employer under the FMLA and copies of all eligibility notices given to employees;
   
  • Any documents describing employee benefits or employer policies and practiced regarding the taking of paid and unpaid leave;
   
  • Premium payments of employee benefits;
   
  • Records of any dispute between the employer and an eligible employee regarding designation of leave as FMLA leave, including any written statement from the employer or employee of the reasons for designation and for the disagreement.
   

 

STATE REQUIREMENTS

 Unemployment Insurance

 

 Unemployment Compensation Statutes

  • Employee’s name and address, social security number, dates of hire/separation/re-hire, payment dates for cash and non-wages, dates and hours worked.
   

 Maryland

 5 years

 COMAR 09.32.01.06

 District of Columbia

 7 years

 http://does.dc.gov/service/reporting-questions

 Pennsylvania

 4 years

 34 Pa. Code § 63.64

 Virginia

 4 years

 16 VAC 5-32-10

 Delaware

 4 years  19 Del. Admin. Code 1202-1.0

 Income Tax Withholdings

 

 State Income Tax Statutes

  • Employee name and address, social security number, and occupation;
   
  • Employer’s copy of Form W-2
   
  • The amounts and dates of wage, bonus and other compensation payments, and tax withheld;
   
  • Records of employer tax deposits;
   
  • Records of periods and location of employment;
   
  • Employee withholding exemption certificates (e.g. Form W-4).
   

 Maryland

 3 years

 http://www.dllr.state.md.us/labor/wagepay/
wprecordkeeping.shtml

 District of Columbia

 5 years

 D.C. ST. § 47-1812.02 (requires retention
 but does not provide specific retention period)

 Pennsylvania

 4 years

 http://www.pabizonline.com/starting-a-
business/documents/rev-588.pdf

 Virginia

 3 years

 http://www.tax.virginia.gov/taxforms/business
/withholding%20tax/employer%20withholding
%20instructions.pdf

 Delaware

 3 years

 http://revenue.delaware.gov/services/
wit_folder/section22.shtml

 Contracts

 Generally:

 Contract statutes of limitations aren’t a record
 retention requirement but periods of
 enforcement emphasize need to retain.

 Maryland

 3 years

 Md. Code, Courts & Judicial Proceedings,
 § 5-101, § 5-102

 District of Columbia

 3 years

 D.C. Code § 12-301

 Pennsylvania

 4 years

 42 Pa. Cons. Stat. § 5525

 Virginia

 5 years

 Va. Code § 8.01-246

 Delaware  3 years

 Del. Code, Title 10 § 8106