When Is the Employer W-2 Filing Deadline?
Employers: Understand your complete W-2 obligations for accurate wage reporting and seamless year-end tax compliance.
Form W-2 records annual wages and withheld taxes. It is used for accurate income reporting to the IRS and Social Security Administration (SSA). Employers must prepare and submit W-2s to comply with federal tax regulations, ensuring correct tax calculations.
Understanding the Standard Deadline
Employers are required to file Form W-2 with the Social Security Administration (SSA) by January 31st each year. This deadline also applies to furnishing copies of the W-2 to employees. The January 31st date is consistent for both electronic and paper filings. If this date falls on a weekend or a federal holiday, the deadline automatically shifts to the next business day. Adhering to this date ensures that both federal agencies receive the necessary wage data and employees have their forms in time to file individual income tax returns.
Essential Information for W-2 Preparation
W-2 preparation requires specific data for employers and employees. Employers must have their Employer Identification Number (EIN), business name, and address. For each employee, full names, addresses, and Social Security Numbers (SSNs) are required.
Detailed financial information is also crucial. This includes total wages, tips, and other compensation paid throughout the year. Employers also need to report all withheld taxes: federal income tax, Social Security tax, and Medicare tax, as well as any state or local income taxes. Certain benefit-related information, such as dependent care benefits, contributions to Health Savings Accounts (HSAs), and the cost of employer-sponsored health coverage, must be included. Organizing this data prior to the deadline streamlines the W-2 process.
Filing Methods
Employers have two methods for submitting W-2 forms to the Social Security Administration (SSA) and distributing copies to employees. Electronic filing is mandatory for businesses filing 10 or more information returns, including W-2s. This can be done through the SSA’s Business Services Online (BSO) portal or via authorized third-party payroll software.
For employers filing fewer than 10 information returns, paper filing remains an option. This involves obtaining official IRS Forms W-2 and Form W-3, Transmittal of Wage and Tax Statements, which acts as a summary of all W-2s being submitted. These paper forms are then mailed to the SSA. Employers must distribute specific copies of the W-2 to their employees.
Copy A: SSA
Copies B and C: Employee (for federal tax return and personal records)
Copy 2: State or local tax departments
Copy D: Employer’s records
Electronic delivery to employees is permissible, provided the employee has given their consent.
Penalties for Late Submissions
Failing to file W-2 forms by the deadline or submitting incorrect information can result in penalties by the IRS. These penalties increase based on how late the forms are filed. For instance, penalties can start at $60 per form if filed within 30 days of the deadline, escalating to $120 per form for filings between 31 days late and August 1st, and reaching $310 per form if filed after August 1st or not at all.
These penalty amounts apply per W-2, meaning that a significant number of late or incorrect forms can lead to substantial fines. Separate penalties can also apply if employers fail to furnish employee copies of the W-2 on time. In cases where the IRS determines there was intentional disregard of the filing requirements, the penalty can be even higher, potentially reaching $630 per form with no maximum limit.
How to Correct Errors
If an error is found on a filed W-2, employers must make a correction. The specific form used for this purpose is Form W-2c, Corrected Wage and Tax Statement. A corresponding Form W-3c, Transmittal of Corrected Wage and Tax Statements, must also be filed alongside the W-2c.
When correcting a W-2, the employer will enter both the previously reported incorrect information and the new, accurate information on the W-2c. It is important to file these corrected forms as soon as the error is identified to mitigate potential issues for both the employer and the employee. Once the corrected forms are submitted to the SSA, employers are also responsible for providing updated W-2c copies to the affected employees.