How To File a Corrected W-2 and W-3

A Guide To Form W-2c

If you're a small business owner, note these potential tax deductibles so that you don't pay taxes that could have been extra revenue in your account.

It's much easier to make corrections to W-2 forms before you file them with the Social Security Administration (SSA). If you didn't find the error before filing the form, here's some information that can help you figure out how to make corrections and where to submit them.

Key Takeaways

  • Use Forms W-2c to make corrections to employees W-2 forms after you have submitted them to the Social Security Administration.
  • Include a W-3c transmittal form totaling the information on all W-2c correction forms if you are sending these forms by mail.
  • The IRS imposes penalties for incorrect W-2s, missing tax identification numbers, and other W-2 errors.

What Are IRS Forms W-3 and W-3?

IRS Form W-2 is used by employers to report annual income and the amounts of withholding to employees and to the Social Security Administration.

Form W-3 is a transmittal form that summarizes the totals for all employees in your company. It includes totals for all items on the W-2 form. You don't need the W-3 form if you are filing W-2s online.

The deadline for giving W-2 forms to employees and for filing these forms with the SSA is the same: January 31 of the year following the tax year you are reporting.

Forms W-2c and W-3c are correction forms and must be submitted to the SSA if you need to make most changes to your W-2 forms after you have submitted the original forms.

Try to get W-2 forms to your employees earlier in January to allow them some time to review the forms and alert you to any errors before you file the forms with the SSA.

Common W-2 Errors and How to Correct Them

You may find errors before and after you submit W-2s. The process is different for each situation.

Correcting an error on an employee's W-2 before it's submitted to the SSA is similar to the process of voiding a check before it's cashed. Simply check "void" on Copy A of the original form, the one sent to the SSA. Keep the voided form for your records. Then create a new W-2 with the correct information. Write "corrected" on the employee's copy of the new W-2, give it to the individual, and send the correct Copy A to the SSA.

Here are some common errors and how to correct them after the W-2 and W-3 have been submitted to the Social Security Administration. Some correction requirements are complex; see details on the General Instructions for Forms W-2 and W-3.

Error in Employee Name or Social Security Number

Complete Form W-2c only for boxes d through i. If the Social Security number (SSN) was reported as blanks or zeros, don't use Form W-2c; you must contact the SSA directly at 800-772-6270 for instructions.

Missing or Incorrect Business EIN

Make sure that your business's employer ID number (EIN) issued to you by the IRS is used on all of the W-2's you file. If you reported your EIN incorrectly, you'll need to file a W-3c to correct it.

An Error in an Amount

Fill out the W-2c completely, showing the original and corrected amounts, if you made an error in an amount either for withholding or earnings. You might also have to file Form 941c if you incorrectly reported wages or withholding on a 941 - Employer's Quarterly Tax Statement.

Mistakes with Employer-Sponsored Health Coverage

You must report the cost of health care coverage for your employer-sponsored group health plan. This information appears in box 12 of the W-2 and it's coded "DD." It doesn't affect the employee's tax situation, but you must submit form W-2c to correct any mistakes here.

Mistakes with Retirement Contributions

Retirement plan information appears in box 13 of a W-2, and making a mistake here can cause all sorts of headaches for your employee. It can leave them open to audits, which you don't want. Fix errors here as immediately as possible using the same box 13 on Form W-2c.

Some Other Common Errors

Here are some other common errors on W-2 forms that must be corrected:

  • Omitting the decimal point and cents from entries
  • Making entries that are too small or too large
  • Adding dollar signs to money-amount boxes
  • Wrongly formatting the employee's name in box "e." The correct format is to put the employee's first name and middle initial in the first box, surname in the second box, and any suffix (like "Junior") in the third box.
  • Folding, cutting, or stapling Copy A paper forms mailed to the SSA.
  • Mailing other forms or pages to the SSA

Where to Get W-2c and W-3c Forms

You can't download the red Copy A of Form W-2/W-3 or W-2c/W-3c from the Internet. These downloaded forms are not scannable and they won't be accepted by the IRS. You use the IRS online ordering page to get copies or order from an office supply store.

Make sure you are ordering the correct form for the tax year. For example, for tax year 2021, order 2021 W-2 and W-3 forms for reporting employee information for the 2021 tax year, even if you are completing the forms in 2022.

Filing W-2c and W-3c Forms

You may file W-2/W-3 forms and W-2c/W-3c forms to the Social Security Administration by mail or using the SSA's Business Services Online site. You can also file Forms W-2c and W-3c the same ways. If you file 250 or more W-2 forms, you must file them electronically.

Penalties for W-2 Errors

Be sure to get your W-2s out to your employees by the due date and your W-3s transmitted to the SSA on time, including corrected versions, to avoid penalties for late distribution and filing. The IRS considers several different kinds of errors on W-2 and W-3 forms when determining penalties:

  • Errors due to a reasonable cause, something beyond your control
  • Failure to include correct information errors related to a taxpayer ID number (TIN), a payee's surname, and any money amounts.
  • Inconsequential errors that don't prevent the SSA or the IRS from processing the form
  • "De minimis" errors, meaning those with small amounts

Intentional disregard of filing or correct information requirements has a penalty of $570 per W-2 form, with no maximum.

Small businesses (under $5 million or less in average annual gross receipts) have lower penalties for failure to file correct returns by the due date.

Penalty amounts:

  • $50 for each W-2 corrected within 30 days of the due date,
  • $110 if you file more than 30 days late and before August 1, and
  • Up to $280 for each form if you wait until after August 1.

Frequently Asked Questions (FAQs)

What should an employee do if they received a W-2c after filing their taxes?

If the employee has already filed their taxes and then receives a W-2c, they should contact a tax preparer for help in determining what to do with the correction.

Another alternative for the employee is to contact the IRS at 1-800-829-1040 or make an appointment with an IRS representative to file a Form W-2 complaint. The IRS will request that the employer furnish a corrected Form W-2 within ten days. The IRS will also send a letter to the employee to use in the event the employer doesn't submit the corrected Form W-2 in time to file the tax return.

Where do you send Form W-2c?

Mail Forms W-2c and W-3c from the U.S. Postal Service to

Social Security Administration

Direct Operations Center

PO Box 3333

Wilkes-Barre PA 18767-3333

If you use another carrier, use this address:

Social Security Administration

Direct Operations Center

Attn: W-2c Process

1150 E. Mountain Drive

Wilkes-Barre PA 18702-7997

You can also use the SSA's Business Services Online website to file W-2c forms electronically.

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