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Workforce Management

Save the Environment and Stay Secure with Paperless W-2s & 1095-Cs

If you’re a business leader or owner, you’re looking to contain costs. You start with big ticket items like labor costs, overtime, and benefits premiums. But what about the cost of paper?

The average office worker still goes through 10,000 sheets of paper a year. With the cheapest copier paper running $7 per ream (500 sheets), that’s about $140 per employee per year (Pairsoft), not counting printer supplies and filing cabinets.

In addition to these often-overlooked hard costs, using paper documents negatively affects productivity (think of the time spent searching for files), and it’s terrible for the environment. In fact, offices in the U.S. use 12.1 trillion sheets of paper every year resulting in 50% of business waste coming directly from paper (The World Counts).

Many companies now use direct deposit for their employees’ pay, which has dramatically reduced paper consumption, but you can take your efforts a step further by making the switch to electronic W-2 and 1095-C forms as part of your year-end process.

What is Form W-2?

The IRS requires that employers complete Form W-2 (Wage and Tax Statement) for all employees so that they can report taxable wages to the government. Employees have typically received hard copies of their W-2s mailed to their homes, but they can be sent electronically. As more organizations have looked to reduce paper processes, the number of W-2s provided to employees digitally has increased. Within the last decade, online W-2 preparation and filing have grown, and the demand for the paper form has decreased.

What is Form 1095-C?

If your company employs more than 50 full-time or full-time equivalent employees (FTEs), the IRS considers you an Applicable Large Employer (ALE) under the Affordable Care Act (ACA). You are required to inform the IRS about the health insurance you offer to those employees on Form 1095-C. The form includes:

  • The employee and company name
  • The months during the year that the employee was eligible for health insurance coverage
  • The cost of the least expensive monthly insurance premium the employee would have paid

If your company is an ALE and doesn’t offer employees health insurance, Form 1095-C will also indicate that status, and you may be subject to financial penalties.

Filing these two IRS-mandated forms online is cost-effective, saves time, and can reduce the probability of audits and manual errors. Plus, you’ll eliminate the expense and hassle of printing paper copies, purchasing postage, and stuffing envelopes by hand.

Introducing Your New Paperless Program to Employees

With any initiative that brings about change at your company, employees must be made

aware of what is going to happen and how it will affect them. Sending a company-wide email or posting to the company portal is a great way to get the word out and point employees to the area where they can download their forms.

Some key phrases to use in your communication to help introduce paperless Forms W-2 and 1095-C to your employees include:

  • Paperless forms are good for the financial health of our company because they help us remain competitive by saving time and resources.
  • Going fully paperless benefits the environment (less paper waste) and is good for our employees (immediate, secure service).
  • Paperless documents help protect sensitive personal information—such as your salary and Social Security number—from theft.

Providing paperless options for not only benefits enrollment and payroll, but also expanding the program to your year-end tax documents—like W-2s and Form 1095-Cs—makes sense for all the reasons listed above. But emphasizing the cost savings should be your ace in the hole to kick your efforts into high gear and gain the internal support you need to get the job done.

One Minute Takeaway

  • Companies can get up to $9,600 in Work Opportunity Tax Credits (WOTC) per employee
  • WOTC was designed to help employees from certain groups move from economic dependency to self-support
  • Credit amounts will be based on the number of hours an employee works