Can a W-2 Be Wrong? Here’s How to Correct It

The Form W-2, Wage and Tax Statement, is a fundamental document for every employed individual in the United States, serving as a record of annual earnings and taxes withheld. Issued by employers, it plays a central role in preparing an accurate federal income tax return. Its accuracy is paramount; discrepancies can lead to delays in tax processing, incorrect tax liabilities, or issues with government benefits. Errors on a W-2 can occur, making it important to understand its contents and how to address inaccuracies.

Common Types of W-2 Errors

Errors on a Form W-2 can affect various data fields and impact tax obligations. One common category involves personal information, such as an incorrect name, Social Security number (SSN), or address. The employee’s name and SSN must precisely match the records on file with the Social Security Administration (SSA) to avoid processing delays. Inaccuracies in the employer’s identification number (EIN) or company details can also cause issues.

Mistakes frequently occur in the reporting of wages and taxes. Box 1, “Wages, tips, other compensation,” should reflect all taxable income, including salary, bonuses, and certain taxable fringe benefits, after subtracting pre-tax deductions like health insurance premiums or retirement contributions. Understated or overstated amounts in this box can lead to incorrect taxable income reported to the IRS. Federal income tax withheld, shown in Box 2, indicates the total amount of federal taxes paid throughout the year from paychecks.

Social Security and Medicare wages and taxes, reported in Boxes 3, 4, 5, and 6, are also susceptible to errors. Social Security tax has a wage base limit, meaning a maximum amount of earnings subject to this tax. Medicare tax has no wage base limit, and an additional Medicare tax applies to wages exceeding certain thresholds, which employers are required to withhold.

Errors can also appear in Box 12, which reports various types of compensation or benefits using specific codes. These can include elective deferrals to retirement plans like 401(k)s or 403(b)s, the cost of employer-sponsored health coverage, or dependent care benefits. Box 10 specifically reports dependent care benefits, and amounts exceeding $5,000 are typically included in Box 1 as taxable income. Any misreporting in these boxes can impact tax calculations and compliance.

Steps to Verify W-2 Accuracy

Verifying W-2 accuracy ensures your tax return is correct and avoids potential issues with the IRS. Begin by gathering all relevant financial documents from the tax year. This includes your final pay stub, which summarizes year-to-date (YTD) earnings and deductions, as well as any statements related to retirement contributions, health savings accounts (HSAs), or other benefits.

Carefully compare the personal information on your W-2 with your official records, such as your Social Security card and government-issued identification. Next, reconcile wage and tax withholding amounts by comparing the YTD totals from your final pay stub to the corresponding boxes on your W-2. Box 1 wages should align with your YTD taxable wages, which generally exclude pre-tax deductions like health insurance or retirement plan contributions.

For federal income tax withheld (Box 2), Social Security tax withheld (Box 4), and Medicare tax withheld (Box 6), ensure these figures match the YTD amounts on your pay stubs. Be mindful of the Social Security wage base limit, as Social Security tax should not be withheld on earnings above this threshold. Finally, review Box 12 for any amounts reported, cross-referencing them with your contribution statements for retirement plans, HSAs, or other reported benefits. Confirm that the employer’s name, address, and EIN on the W-2 are also correct.

The Process for Correcting a W-2

Upon identifying an error on your W-2, contact your employer’s payroll or human resources department promptly. Provide them with specific details of the discrepancy, referencing the particular box or information that appears incorrect, and offer supporting documentation such as pay stubs or benefit statements. The employer is responsible for issuing a corrected W-2.

If an employer needs to correct a W-2, they will typically issue a Form W-2c, Corrected Wage and Tax Statement. This form amends the original W-2 and provides the updated information. Obtain this corrected form before filing your income tax return if you have not already done so.

If you have already filed your tax return based on an incorrect W-2, you will need to file an amended tax return using Form 1040-X, Amended U.S. Individual Income Tax Return. This form allows you to correct previously submitted tax information based on the accurate W-2c. Filing an amended return may result in additional tax owed or a refund, depending on the nature of the original error.

In situations where an employer is unresponsive or unwilling to issue a corrected W-2, you have recourse through the IRS. You can contact the IRS for assistance, and they may instruct you to file Form 4852, Substitute for Form W-2, Wage and Tax Statement. This form allows you to estimate wages and withheld taxes if your employer won’t provide or correct your W-2. Using Form 4852 should be considered a last resort after attempting to resolve the issue directly with your employer.