Common Errors in Completing Form W-2

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Being forewarned is forearmed. Before you send W-2 forms to employees and file these forms with the Social Security Administration (along with transmittal form W-3), review these common errors to avoid problems.

Filing W-2 Forms Late

The filing deadline for W-2 forms has been moved up to January 31 of the following year. So your 2019 W-2 forms for employees must be submitted to the Social Security Administration no later than January 31, 2020.

The January 31 deadline is the same for giving W-2 forms to employees and filing the forms with the Social Security Administration. Try to give these forms to employees early in January, so you have time to correct errors before you have to file with the SSA.

Using the Wrong Year's W-2 Form

Use the W-2 form for the year the income was taxable, not the year you are filing the form. For example, for employee wages in 2019, use the 2019 W-2 form; this form will be given to employees and filed with the Social Security Administration in January 2020.

Missing the filing deadlines.

You must provide W-2 forms to employees no later than the end of January, and you must submit these forms to the Social Security Administration no later than the end of February. The deadlines change each year depending on when the date falls on the calendar. If the deadline is on a weekend or holiday, the date is moved to the next business day.

There are penalties for late filing of W-2 forms and 1099-MISC forms.

Not Using the Approved W-2 Form

You cannot download the W-2 form, copy and use it. The red on A is a special ink. You must get the approved forms, from an office supply company, the IRS, or from a software company.

Failing to Stop Social Security Withholding

Social Security withholding must be stopped at the Social Security maximum taxable wages for each year. (This maximum changes in most years to reflect the cost of living.) Although this is not specifically a W-2 error, it is common and will cause you to over-report Social Security wages for an employee.

If you fail to stop withholding at the annual maximum, you must give back the excess to the employee and correct the W-2 and Form 941, the quarterly wage and tax report for any quarters which reflect the excess. For example, if the employee reached the maximum for Social Security withholding in September, you must change Form 941 for the third quarter.

Sending W-2 Forms to the IRS

Social Security forms must be given to employees by the end of January and filed with the Social Security Administration -- NOT the IRS -- by the end of January, along with the transmittal form W-3, which accumulates all information from all W-2s.

Not Filing Online When Required

You must file W-2 forms online if you have a specific number to file. As of 2019, you must e-file if you have 250 or more forms.

  • Starting with the 2021 tax year, if your business has 100 W-2s to file, you must file online.
  • For tax years after 2021, if your business has 10 or more W-2s to file, you must file online.

Penalties apply if you don't file online and you are required to do that. You must get a waiver if you have a valid reason for not e-filing.

Making These Common Form Errors on Form W-2

The most common form errors on W-2 forms include:

  • Failing to include decimal and cents on amounts
  • Failing to use black ink (making entries too light)
  • Making entries too large or too small. The IRS suggests you use 12 pt. Courier type font for printing W-2s.
  • Mis-formatting employee name. Employee first name and middle initial goes in the first box, the employee surname goes in the second box, and any suffix (like "Jr.") goes in the third box.

Using financial software can help you avoid many of these errors on W-2 forms, especially form errors, and your software can warn you when you are reaching the Social Security maximum wage amount. Check out this article on 2012 accounting software programs by Rosemary Peavler, Guide to Business Finance, focusing on programs that include payroll functions.

How to Correct a W-2 Form

If you can correct the error before filing with SSA, just make the correction and submit the corrected form.

If you find the error after you have filed with the SSA, you must submit a corrected W-2 along with a corrected transmittal form W-3c).