Do you use electronic or paper withholding forms? Why?
Online, only if required. Paper always, if allowed. Paper always, for my copies (which go n a cabinet by year, for record retention compliance, then destroyed as soon as allowed.)
There were some onerous rules in place regarding record retention, making what DW said very critical. Since I do not rely on electronic records, I do not keep current on the electronic record rules, but the last time I looked, going paperless for some things gives the tax agency the privilege of warrant-less search, at any time, of any machine or location which may have the records, and puts a burden of proactive notification if there is even the slightest chance the required records might be unavailable (change computers, you probably have to notify there could have been something lost). That was a federal rule. States likely vary wildly. One, I saw a few years back, required the employer to keep the records in state (making many online services out of compliance, unless they had some sort of guaranteed in state server), IIRC, it was a vain attempt at protecting SSN data. Could be the rules have been modernized, but I would not count on it personally, and if I were to consider paperless, I would need to do a large amount of research to make sure I am not giving search and seizure permission.
Note, I am VERY jaded on this issue. I have been on a jury with the case hinging on an improper search (the authorities lost, and I was the lone vote for acquittal until I proved my case to the other 11), and have been the subject of what was an improper search, and have been subpoenaed many times - mostly in cases where a wide net was cast hoping to catch fish - when even if I wanted or was compelled to, I had no data to share, since I destroy as soon as legally allowed.
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