A W-2 form is a statement that you must prepare as an employer each year for employees, showing the employee's total gross earnings, Social Security earnings, Medicare earnings, and federal and state taxes withheld from the employee.
The purpose of this form is to provide the employee with information that must be included in their income tax form. It also gives the Social Security Administration and the IRS information to verify the employee's income tax return.
Form W-2 Due Date
There are two things you must do with a W-2 form:
Give it to employees by the end of January of the year following the tax year. If you are reporting on employee income for 2019, you must give it to them by January 31, 2020.
Send W-2 forms for all employees to the Social Security Administration (SSA) by the same date (January 31 of the year after the tax year).
The deadline is the same for giving the W-2 to employees and filing it with the SSA. This is a good reason to give employees their forms early in January so that you can find and fix errors before filing.
Parts of the W-2 Form
A W-2 form is a multipart form:
- Copy A goes to the Social Security Administration
- Copy 1 is for the city, state, or locality
- Copy B is for filing with the employee's federal tax return
- Copy C is for the employee's records
- Copy 2 is another copy for a city, state, or locality
- Copy D is for the employer's records
Where Can I Get W-2 Forms?
You can't just copy the W-2 form from the internet. Copy A of the form is printed on special paper. You must use the official forms. You can get the official W-2 forms from a copy shop, some tax software programs (look for the small business version), or your tax preparer.
How Do I File W-2 Forms with Social Security?
You can file W-2 forms in two ways:
By mail. You can send the SSA paper copies for the W-2s for all employees. If you file by mail you will need to include a W-3 form, a transmittal form that show the totals for all boxes on the W-2 form.
The address for filing paper forms W-2 and W-3 is "Social Security administration, Direct Operations Center, Wilkes-Barre, PA 18769-0001."
Online. The SSA encourages employers to file online. You can use the SSA's Business Services Online site (you'll need to register first). If you file W-2s online, you don't need to include the W-3 form.
You must file online if you have 250 or more W-2 forms to file.
This online filing requirement is changing in future years:
- 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.
What Information Do I Need to Complete W-2 Forms?
To complete the W-2 form, you'll need information on your business, on the employee, and on the employee's earnings, withholding, and benefits.
Information about Your Business
For each W-2, you will need to include information about your business:
- Your Employer ID Number
- Your Business Name
- Your Business Address
- Your Business's State Tax ID Number (check with your state's department of revenue)
Information about Your Employees
For each employee, you will need up-to-date personal information:
- Social Security Number or other tax identification number
Information about Employee Earnings
Next, you will need information on total wages and withholding for each employee for last year:
- Total wages, tip income, and other compensation
- Total Social Security wages (up to the Social Security maximum)
- Total Medicare wages
- Social Security tips and allocated tips
Wages used to calculate Social Security and Medicare may be different from an employee's gross pay. Use the information on this article on Social Security wages and check with your tax professional before you calculate wages on Form W-2.
Information on Retirement Plans
In Box 12, you will need to indicate, for each W-2, if each employee participates in a retirement plan or a non-qualified plan with your company, if this employee is a statutory employee, or if the person received third-party sick pay.
Information on Special Benefits
Box 13 of the W-2 requires information about deductions for employee benefit plans and other deductions that must be reported on the employee's income tax return. The instructions for Form W-2 contain a reference guide for Box 13 codes.
Where Do I Find the Information for the W-2?
The information for this form comes from your payroll register, which shows year-to-date totals for each employee for wages and withholding, along with deductions for medical plans, health savings accounts, and other items.
You will also need a current W-4 form for each employee to get the information for withholding federal income tax and FICA tax (Social Security/Medicare tax). The employee completes the W-4 form to give you information on their taxpayer ID number) and their withholding amounts.
Beginning in 2020, you must use a new W-4 form to get information for employee withholding. The new form is required beginning January 1, 2020 for new employees and for current employees who want to make a withholding change. You don't need to have all current employees submit a new W-4 form unless they want to make a change.
How Do I Complete the W-2 Form?
Once you've gathered all of your information and the proper forms, follow step by step instructions carefully to avoid any errors.
What If I Make a Mistake on a W-2 Form?
Before you send off those forms to employees, check for errors. If you do make a mistake, you can easily correct the form and give the corrected form back to the employee. If the mistake is discovered after you have submitted the forms to the Social Security Administration, here's the process for correcting the form. If you find the error after you have submitted the original forms, you must submit a W-2c form and a W-3c form.
Warning: W-2 forms are complicated, and there are penalties for giving incorrect information. Get help from a payroll expert or your tax professional before you attempt to complete W-2 forms yourself.