Form W-2: Wage and Tax Statement

The Wage and Tax Statement. Employers must provide this form to each employee by January 31st, summarizing their annual earnings and tax withholdings for the previous year.

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:

  1. Complete Form W-2 for each employee
  2. Provide copies B, C, and 2 to the employee
  3. 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

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