Form W-2 Tips

Minimum Requirements:

Form W-2, Wage and Tax Statement reports the wages, tips and compensation paid as well as any Federal income, Social Security and Medicare taxes withheld for the year. Generally, each year by January 31, most employers must file Copy A electronically with the Social Security Administration (SSA), and furnish to each employee Copies B, C, and 2. Because the employees' Social Security and Medicare benefits are computed based on information reported on Form W-2, it's very important to prepare Form W-2 correctly and file it timely. When you e-file your Form(s) W-2 with the SSA, no Form W-3 filing is required. Special due dates apply if you have terminated your business.

Parts of a W-2 Packet:

Copy A – Employers are responsible for filing this copy with the Social Security Administration (SSA).
Copy 1 – Employers are responsible for filing this copy with the appropriate state, city or local taxing authorities, if applicable.
Copy B, C and 2 – Employers are responsible for furnishing these copies to the employee by January 31. With employee consent, employers are permitted to furnish copies B, C and 2 of Forms W-2 electronically.
Copy D – Employers should retain this copy for their records.

When to File:

You must submit Form(s) W-2 to the SSA and furnish Copies B, C, and 2 to the employee by January 31. Special due dates apply if the business has terminated. If any regular due date falls on a Saturday, Sunday or legal holiday, file by the next business day. You may request one non-automatic 30-day extension of time to file by submitting justification for the delay with Form 8809 before the due date. An approved Form 8809 only extends the due date for filing W-2’s to the SSA, it does not extend the due date for furnishing required copies of Form W-2 to the employee. You may request an extension of time to furnish Copies B, C and 2 of Form W-2 to the employee(s) by faxing Form 15397, Application for Extension of Time to Furnish Recipient Copies to IRS.

Penalties:

If you fail to file with SSA or furnish to the employee a correct Form W-2 by the due date and cannot show reasonable cause or obtain any waivers, you may be subject to one or more penalties because failure to file to SSA is considered a separate penalty from the failure to furnish copies of the W-2 to the employee.

Various reasons penalties can be assessed include:

Not filing on time
Not including all required and correct information
Filing by paper when you were required to file electronically
Omitting or reporting an incorrect tax identification number (TIN)

Electronic Filing:

The Taxpayer First Act included regulations that reduced the electronic filing threshold from 250 to 10 or more total W-2 and 1099 forms. Effective January 1, 2024, if you file a combined total of 10 or more W-2s and 1099 forms, you must file electronically. (You may be charged a penalty if you fail to file electronically when required.) More information can be found at: https://www.ssa.gov/employer/returnfilers.html.

Common Errors on Forms W-2:

Inappropriately checking the "retirement plan" checkbox in box 13
Omitting the decimal point and cents from amounts
Any money field that has no amount to be reported must be filled with zeros, not blanks
Entering dollar($) signs in the money amount fields

Form W-2 Do’s & Don’ts:

DO keep Copy D of Forms W-2 for four years.
DO count all W-2s and 1099s in the total to determine if you exceed the 10 return limit requiring you to electronically file.
DO make sure the Forms W-2 you furnished to employees are clear, legible and postmarked or made available by Jan. 31.
DO file with the State(s) separately.
DO follow U.S. Postal Service rules since address fields are used by SSA to prepare mail correspondence.
DO review the W-2s before submitting, the employer is responsible for the accuracy of the W-2 data reported.
DO NOT furnish employee Forms W-2 that do not comply with IRS standards.
DO NOT submit the same information on paper forms.