What is Form W-2?
Form W-2, Wage and Tax Statement, is used by employers to report wages paid to employees and the taxes withheld from those wages. Every employer must provide Form W-2 to each employee and file copies with the Social Security Administration (SSA).
Who Must Receive Form W-2?
Every employee who:
- Was paid wages during the year
- Had income tax, Social Security tax, or Medicare tax withheld
- Received wages of $600 or more during the year
This includes full-time, part-time, and temporary employees.
When Must Form W-2 Be Issued?
Employers must:
- Provide Form W-2 to employees by January 31
- File Copy A with the SSA by January 31
- File earlier if the employee separates from employment and requests the form
What Information is Reported on Form W-2?
Form W-2 includes:
- Employee's name, address, and Social Security number
- Employer's name, address, and EIN
- Wages, tips, and other compensation (Box 1)
- Federal income tax withheld (Box 2)
- Social Security wages and tax withheld (Boxes 3 and 4)
- Medicare wages and tax withheld (Boxes 5 and 6)
- State and local wages and taxes (Boxes 15-20)
Understanding Key W-2 Boxes
Box 1: Total taxable wages for federal income tax purposes. This may differ from Box 3 and Box 5 due to pre-tax deductions like 401(k) contributions.
Box 12: Reports various types of compensation and benefits using specific codes, such as:
- Code DD: Cost of employer-sponsored health coverage
- Code D: Elective 401(k) contributions
- Code W: Contributions to health savings accounts
How to File Form W-2
Employers must:
- Complete Form W-2 for each employee
- Provide copies B, C, and 2 to the employee
- File Copy A with Form W-3 to the Social Security Administration
Electronic Filing Requirements
Employers filing 250 or more Forms W-2 must file electronically through the SSA's Business Services Online (BSO) system.
Penalties for Late Filing
Penalties for failing to file W-2s on time:
- $60 per form if filed within 30 days late
- $120 per form if filed 31 days late to August 1
- $310 per form if filed after August 1 or not at all
Official Source: SSA Form W-2
