How long to keep tax records: IRS, New York, New Jersey and Connecticut
A missed filing date starts a lot of the cases I see. Lost records make the rest of them harder to fix.
If the IRS or the state asks for proof and you can't find it, you lose the deduction, the credit, or the abatement fight. So here's how long to keep tax records for federal, New York, New Jersey and Connecticut purposes, in plain terms.
How long to keep tax records: the short version
| Keep for | What |
|---|---|
| 3 years | Most income-tax returns and the records behind them (IRS, NY, CT), after you file |
| 4 years | IRS employment-tax records; New Jersey sales-tax records |
| 6 years | Returns where more than 25% of gross income was left off; many CT sales-tax / exemption files (DRS often wants 6) |
| 7 years | Worthless-securities or bad-debt claims |
| As long as you own it, plus 3 years after you sell | Property basis files (purchase, improvements, depreciation) |
| Forever | Unfiled years, and years with a fraudulent return |
When federal and state periods disagree, keep the longer one.
IRS record retention rules
These periods start after you file. A return filed early is treated as filed on the due date.
Income tax
- 3 years in the usual case. That covers most audits and most refund claims.
- 3 years from filing, or 2 years from payment, whichever is later, if you claim a credit or refund after you already filed.
- 6 years if you left off income that is more than 25% of the gross income shown on the return (or certain foreign financial assets over $5,000).
- 7 years if you claim a loss from worthless securities or a bad debt.
- Indefinitely if you never filed that year, or if the return was fraudulent.
Keep a copy of every filed return. You will need it for amendments, basis, and next year's return.
How long to keep payroll records
Keep employment-tax records for at least 4 years after the tax becomes due or is paid, whichever is later. That includes Forms 941 and 940, W-2s, W-4s, deposit records and the payroll register.
Unpaid withholding can become personal debt under the trust fund recovery penalty. Those files matter. Payroll tax debt
Property and basis
Keep records for a house, a rental, equipment or other property until the limitations period ends for the year you dispose of it. You need them for depreciation while you own it, and for gain or loss when you sell.
If you got the property in a nontaxable exchange, keep the old property's records too. Your basis carries over.
Electronic records
Scans and cloud files are fine if you can produce a clear, complete copy when the IRS asks. Keep the same retention periods as paper.
New York
Income tax and most business returns
New York says keep records and supporting documents for at least 3 years after you file. That covers individuals and businesses: income, withholding, estimated payments, and the proof behind credits and deductions.
Sales tax record retention in New York
Sales-tax vendors must keep transaction records for 3 years from the due date of the related return, or the filing date if later (20 NYCRR 533.2). Keep them longer if a period is still open, extended, or in a Tax Department or court proceeding.
Guest checks: 3 years, unless the Department lets you destroy them earlier.
Practical tip for NY
Three years is the floor. If federal needs 6 years on that same year (big income omission), keep the New York file for 6 too.
New Jersey
Sales and use tax
New Jersey is stricter than New York here. Sales slips, invoices, receipts, cash-register tapes, guest checks and purchase records must be kept for 4 years from the filing date of the quarterly sales-tax period they belong to (N.J.A.C. 18:24-2.3).
Other Division of Taxation records
Keep whatever the specific tax statute or regulation requires, and anything needed to prove the correct liability. When in doubt, match the 4-year sales-tax floor for business books tied to New Jersey filings.
Practical tip for NJ
If you sell in New Jersey and New York, the New Jersey 4-year sales-tax rule usually wins for shared sales files.
Connecticut
Income tax
DRS says keep the return, worksheets and records of everything on the return until the statute of limitations expires. That is usually 3 years from the later of the due date or the filing date. Keep them longer if you have a net operating loss or credit carryforward that keeps the year open.
Sales and use tax
State law requires business records for at least 3 years from the extended due date of the return (Conn. Agencies Regs. § 12-2-12). DRS also tells sellers that audits can look further back, and recommends keeping sales-tax records for 6 years. Keep exemption and resale certificates for at least 6 years.
Practical tip for CT
For Connecticut sellers, plan on 6 years for sales files and exemption certificates, even though the regulation floor is 3.
How long to keep business records, and which ones matter
You do not need every receipt forever. You do need enough to rebuild the return:
- Filed returns (federal and state) and e-file acknowledgments
- W-2s, 1099s, K-1s and year-end broker statements
- Bank and credit-card statements that support income and expenses
- Invoices, receipts and mileage logs for deductions you claimed
- Payroll registers, deposit receipts and Forms 941 / NYS-45 / NJ-927 / CT-941
- Sales journals, exemption certificates and sales-tax returns
- Closing statements, improvement invoices and depreciation schedules for property
- Notes or emails that explain a judgment call on the return
When you can shred
After the longest applicable period above ends, and only if:
- No audit, protest or collection case is open for that year
- No carryover (loss, credit, basis) still depends on that year
- Your bank, landlord, insurer or lender does not need the file longer
When tax and non-tax rules disagree, keep the longer one.
Rules can change, and your facts can push a period longer.
FAQ
How long should I keep my tax returns?
Keep a copy of every filed return. Keep the records behind it for at least 3 years after you file, 6 years if more than 25% of gross income was left off, 7 years for a worthless-securities or bad-debt loss, and indefinitely for a year you never filed.
How long do I keep payroll records?
At least 4 years after the tax becomes due or is paid, whichever is later. That includes Forms 941 and 940, W-2s, W-4s and deposit records.
How long do I keep sales tax records in New York, New Jersey and Connecticut?
New York: 3 years from the due date of the return, or the filing date if later. New Jersey: 4 years. Connecticut: the regulation says at least 3 years, but DRS recommends 6, and exemption certificates should be kept at least 6.
Are scanned receipts OK for the IRS?
Yes, if you can produce a clear, complete copy when asked. Keep them for the same periods as paper.
When can I shred old tax records?
After the longest period that applies has ended, and only if no audit, protest or collection case is open, no carryover depends on that year, and no lender or insurer needs the file.
Related: Payroll tax debt and the trust fund penalty · File even if you can't pay · Unfiled tax returns help
Official sources: IRS: How long should I keep records? · IRS: Employment tax recordkeeping · NY Tax Department: Recordkeeping for businesses
Tied to a deadline problem?
Missing a date is one issue. Missing the proof is another. If you're behind on filing or got a penalty notice, book a free consultation and bring what you still have. I help with IRS, New York, New Jersey, Connecticut and Pennsylvania tax issues.
Solomon Grosinger, Enrolled Agent
I'm licensed by the IRS and have represented taxpayers before the IRS and New York, New Jersey, Connecticut and Pennsylvania tax agencies from Brooklyn since 2017.
General info, not advice for your specific case.