Why exactly is Form W-2 important for employers, and what does it mean for employers? And what has changed for W-2 filers in 2022? Let’s find out.
What Is Form W-2?
Form W-2 is the Wage and Tax Statement issued by an employer to an employee (and to the IRS) at the end of each year. The form reports an employee’s annual wages and the amount of taxes withheld from their paychecks.
Form W-2, also known as the Wage and Tax Statement, outlines an employee’s annual wages and the amount of taxes withheld from their paycheck.
The IRS uses the information on Form W-2 to verify an employee’s reported income and taxes paid. The form also calculates whether an employee owes any additional taxes or is due a refund.
What Information Is Included on Form W-2?
Form W-2 includes several pieces of important information, including:
- Employer’s name and address
- Social Security number of the Employee
- Employee’s gross wages for the year
- Federal, state, and local taxes withheld from the Employee’s paycheck
- Any other amounts withheld from the Employee’s paycheck (for example, retirement savings or health insurance)
- Employer Identification Number (EIN)
- Control Number
Form W-2 Deadlines & Important Dates
The deadline for employers to send out Form W-2 to employees is January 31. Employees should receive their W-2s by early January to file their tax returns on time.
Here’s the detailed table of Form W-2 deadlines:
|Filing Type||Due Date|
|Recipient copy||31st January 2023|
|IRS eFile||31st January 2023|
|IRS Paper Filing||31st January 2023|
W-2 Filing Requirements: Do You Need To File A W-2?
You need to file a Form W-2 for each employee, if:
- You’ve paid $600 or more in cash or non-cash payments
- You’ve paid remuneration to an employee during the year in exchange for their services
- You are self-employed, and you’ve paid your employee for the services performed in the course of business or trade.
New: Penalties For Failure To File W-2 Have Increased
If an employer fails to file W-2s on time, they will face a penalty. While this is established, there has been a change to the norm.
As per the new IRS guidelines, failure to file penalties has increased for W-2 filers.
Failure to file correct information returns by the due date
- If an employer fails to file accurate information in the W-2s by the due date, they will face a penalty of $50 per return if they correctly file within 30 days of the due date. The maximum penalty per return is $588,500 ($206,000 for small businesses).
- If an employer fails to file accurate information in W-2 returns by more than 30 days after the due date, they will face a penalty of $110 per return if they correctly file within 60 days. The maximum penalty per return is $1,766,000 ($588,500 for small businesses).
- If an employer fails to file accurate information in W-2 returns by more than 60 days after the due date, but before August 1st, they will face a penalty of $290 per return. The maximum penalty per return is $3,532,500 ($1,177,500 for small businesses).
What are The Different W-2 Filing Methods?
The Social Security Administration (SSA) offers two ways to file your W-2s. One is called Electronic Filing (E-File), and the other is paper filing.
- If you opt for E-File, you must file your W-2s electronically through the SSA’s Business Services Online portal.
- If you prefer a paper file, you will need to print out the W-2 forms and attach W-3 forms. The W-3 forms act as a transmittal for paper filing. You will then need to mail the forms to the Social Security Administration.
- However, in e-filing, the W-3 is not required.
What are the Form W-2 Copies?
There are multiple copies of W-2 forms:
- Copy A goes to the Social Security Administration.
- Copy 1 goes to the state, city, or local tax department, depending on where you live and work.
- Copy B is to be filed with the Employee’s federal tax return.
- Copy C for employers’ record
- Copy 2 is to be filed with the Employee’s state, city, or local tax return.
- Copy D for employers’ record
The most common mistake people make when it comes to their taxes is forgetting to file. Other than that, the next most common mistake is not sending in the correct forms.
Make sure you have your ducks in a row before mailing off your return, and you should be golden.
Things To Remember When You Paper File W-2
- You will need to use special red ink when printing out the forms
- All copies of the W-2s must be stapled together before mailing.
- The Social Security Administration also recommends that you make copies of everything you send in, just in case it gets lost in the mail.
Switch To eFiling With Tax1099
Filing is much simpler and more efficient when you do it electronically.
With Tax1099, you can be relaxed knowing that your W-2s will be filed correctly and on time, without any hassle.
Tax1099 is an IRS-approved e-file provider, and we make it easy to file your forms online. We can help you with Form W-2, as well as a variety of other tax forms.
With Tax1099, you can quickly fill out and file Form W-2 electronically. Your W-2 form will be directly transmitted to the Social Security Administration, and you’ll receive an email notification when it has been accepted.
You can also download, print, and mail copies of your forms to your recipients.
eFiling with Tax1099 is easy, efficient, and accurate.
Get started today to ensure a stress-free tax season!