Form W-2, known as a wage and tax statement, is an Internal Revenue Service (IRS) form that employers use to report employees' wages and taxes withheld. The form must be filed for each employee along with Form W-3 on or before January 31 each year.
The W-2 Form is also used to report FICA taxes to the Social Security Administration. If you're wondering what to do with a W-2 Form, read through our guide and answers to frequently asked questions below.
Who must fill out IRS Form W-2?
According to the IRS, all employers (regardless of trade or business) that pay wages to one or more employees, including non-cash payments of $600.00 or more per year, must file a Form W-2 for each employee. By law, all amounts must be reported if any income, Social Security, or Medicare tax was withheld for services performed, even if the employee is related to the employer.
When to Fill out a W 2 Form:
- You withheld any income, Social Security, or Medicare tax from wages regardless of wage amount.
- You would have had to withhold income if the employee had claimed no more than one withholding or had not claimed exemption from withholding on Form W-4.
- You paid $600.00 or more in wages even if you did not withhold any income, Social Security, or Medicare tax.
Important to Note:
- Anyone required to file Form W-2 must file Form W-3 to transmit Copy A of Forms W-2.
- Make a copy of Form W-3, keep it and Copy D (For Employer) of Forms W-2 with your records for 4 years.
How do I file Form W-2?
You can either mail or electronically file Forms W-2 and W-3 on the SSA's Employer website at www.socialsecurity.gov/employer.
What are the penalties for filing Form W-2 late?
If you fail to file a correct W 2 Form by the due date, you may receive a penalty. The penalty applies if you:
- Fail to file timely.
- Fail to include all information required to be shown on Form W-2.
- Include incorrect information on Form W-2.
- File on paper forms when you are required to e-file.
- Report an incorrect TIN.
- Fail to report a TIN.
- Fail to file paper Forms W-2 that are machine readable.
The penalty amount is based on when you file Form W-2 correctly. Penalties range from $50.00 to $270.00 per Form W-2, depending on the number of forms you have submitted late and the date on which you submitted them.
Where can I get W2 forms?
To order official IRS Forms W-2 and W-3, which include a scannable Copy A for filing, visit the IRS Online Ordering for Information Returns and Employer Returns webpage at www.irs.gov/orderforms. Click on Employer and Information Returns. The IRS will mail you the scannable forms.
Can I ask for an extension to file IRS Form W-2?
Employers may request an extension of 30 days to file Form W-2 by submitting a complete application on Form 8809 "Application for Extension of Time To File Information Returns." Bear in mind that the IRS will only grant an extension in extraordinary circumstances. Refer to the SSA website for more information.
To find out more about reporting income taxes, social security tax, and Medicare taxes withheld from employees', see our article on Form 941. And for more information on changes by the IRS to form W-4 read IRS releases draft form W-4: Essential Employee Information.