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Committee lowers electronic filing threshold for employer withholding reports to 75 employees

2826353 · March 31, 2025

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Summary

Senate Bill 503, introduced by Senator Steve Kroll and explained by DFA staff, would require more employers to file annual withholding statements and W-2s electronically by lowering the employer-employee threshold; committee approved the measure by voice vote and DFA said the change would shift about 262 filers from paper to electronic reporting.

The Revenue & Tax Committee approved Senate Bill 503, which lowers the threshold requiring employers to file annual income-tax withholding statements electronically. Senator Steve Kroll presented the bill and Paul Gehring of the Department of Finance and Administration explained the substance.

"Current law requires an employer with more than 125 employees to file an annual income tax withholding statement electronically. Under senate bill 503, that would reduce the threshold from a 125 employees to 75," Gehring said. He added the bill would also apply electronic filing requirements to annual withholding statements and W-2s and extend the electronic requirement to third-party reporting agents when the employer is required to file electronically.

Gehring said DFA can waive the electronic filing requirement in cases of undue hardship and that DFA's analysis estimated about 262 taxpayers currently filing on paper would be required to file electronically under the change. The department reported no adverse feedback from taxpayers after prior threshold reductions.

Senator Hester moved the committee to pass the bill and Senator Boyd seconded; the committee voice vote was recorded as aye with no opposition announced and the chair declared the motion carried.