What to Do When Your W-2 Is Incorrect

A W-2, or Wage and Tax Statement, is a tax document employers must issue to each employee by January 31st annually. This form reports an employee’s annual wages, tips, and other compensation, along with federal, state, and local taxes withheld. The information on a W-2 is used to prepare and file federal and state income tax returns. Its accuracy is important, as discrepancies can lead to delays in processing tax returns, incorrect tax liabilities, or issues with Social Security benefits.

Understanding W-2 Errors

Errors on a W-2 form can arise in various sections, each carrying different implications for the taxpayer. These inaccuracies are broadly categorized into issues with personal information, wage and income details, and tax withholding amounts. Recognizing these common errors is the initial step in addressing the problem.

Personal information errors involve misspellings of an employee’s name, an incorrect Social Security Number (SSN), or an outdated address. An incorrect name or SSN is problematic because the Social Security Administration (SSA) cannot properly credit earnings to an individual’s record if this information does not match official records. This mismatch can affect future Social Security benefits. While an incorrect address is less severe for tax filing, it can cause delays in receiving important tax documents.

Wage and income information errors occur when amounts reported in boxes such as Box 1 (Wages, tips, other compensation), Box 3 (Social Security wages), Box 5 (Medicare wages and tips), or Box 7 (Social Security tips) are inaccurate. If Box 1 inaccurately reflects an employee’s total taxable earnings, it can lead to over-reporting or under-reporting income on a tax return, impacting federal income tax liability. Incorrect amounts in Box 3 or Box 5 can affect Social Security and Medicare taxes attributed to an individual’s earnings, which are used to determine future benefits.

Withholding information errors relate to incorrect amounts in Box 2 (Federal income tax withheld), Box 4 (Social Security tax withheld), Box 6 (Medicare tax withheld), or any state/local tax withholdings listed in Boxes 17 and 19. If too little federal income tax is shown as withheld in Box 2, a taxpayer might owe more tax or face underpayment penalties. Conversely, if too much is shown, it could lead to a larger refund or a reduced tax bill. Errors in Social Security and Medicare tax withheld can affect both the employee’s and employer’s tax obligations and proper credit for these contributions.

Requesting a Corrected W-2

Upon identifying an error on a W-2 form, contact your employer to request a correction. This initial communication should be directed to the employer’s payroll or human resources department. Clearly articulate the specific error found on the W-2, referencing the box number and the correct information. Providing supporting documentation, such as pay stubs showing accurate year-to-date earnings and withholdings, can help expedite the correction process.

The employer is responsible for issuing a corrected W-2, known as Form W-2c, Corrected Wage and Tax Statement. This form details the previously reported incorrect information and the newly corrected amounts. Employers are generally required to correct errors on W-2s as quickly as possible to avoid penalties from the Social Security Administration.

After contacting the employer, allow a reasonable timeframe for them to process the request and issue the Form W-2c. While there is no specific deadline for employers to issue a W-2c, prompt action is recommended. If the employer is unresponsive or delays providing the corrected form, a polite follow-up is appropriate. Maintaining a record of all communications, including dates, names of individuals spoken to, and summaries of discussions, is advisable, as this documentation can be crucial if further action becomes necessary.

Filing Your Taxes Without a Corrected W-2

If an employer is unresponsive or fails to provide a corrected W-2 (Form W-2c) by the tax filing deadline, taxpayers have alternative avenues to ensure their taxes are filed accurately and on time. After attempting to obtain the corrected form from the employer, individuals can seek assistance from the Internal Revenue Service (IRS). Contact the IRS directly by calling their toll-free number or by making an appointment at a Taxpayer Assistance Center.

When contacting the IRS, be prepared to provide specific details. This includes your name, address, Social Security number, and the dates you worked for the employer. You will also need the employer’s name, full address, and phone number. The IRS will then contact the employer and request they furnish the corrected W-2 within a specified timeframe, typically 10 days.

Should the employer still not provide the corrected W-2 in time for filing, the IRS may send instructions for using Form 4852, Substitute for Form W-2, Wage and Tax Statement. This form allows taxpayers to estimate their wages and withheld taxes based on their available records, such as final pay stubs. Form 4852 requires an explanation of how the amounts were determined and the efforts made to obtain the correct W-2 from the employer.

Attach Form 4852, along with any supporting documentation like pay stubs or bank statements showing direct deposits, to your tax return. While using Form 4852 allows for timely filing and helps avoid potential penalties, be aware that the IRS may contact you or your employer for further information to verify the reported amounts. If a corrected W-2 is received after filing with Form 4852 and there are discrepancies, an amended tax return (Form 1040-X) may be necessary to reconcile the information.