Form W-2 is used to collect wage and salary information to be reported at the federal and state levels. The information on this form helps employees to report income when completing Form 1040 on their personal tax returns.
Every employer should complete a Form W-2 for each employee that has worked for them during the year. This form should be filed with the Social Security Administration and any applicable state tax departments and sent to the employees.
All employers must report wage and salary information for all of their employees during the previous year. An employee is defined by the IRS as a worker who is employed by the company and whose work is controlled and directed by the company.
The short answer is no. An independent contractor shouldn’t expect to receive a Form W-2. Instead, they should receive a 1099. A 1099 has a completely separate set of rules that do not apply to the answers found here.
Check out our short W-2 vs 1099 Questionnaire to see how to classify workers.
Some states mandate the filing of Form W-2 with the State. Neglecting to file with the state can lead to penalties. These State penalties are in addition to any Federal penalties.
The penalty rates vary by state and are determined by when you submit your return.
Depending on your state's regulations, you may be required to submit Form W-2 and additional reconciliation forms to the relevant state agency. You can quickly e-file these forms from your BoomTax account. But first, review your W2 state filing requirements.
Complete the Employer Details section. This includes:
Complete the Employee Details section. This includes:
Initiate your e-filing with BoomTax today. For Form W-2 instructions, click here.
Form W-2 must be distributed by the employer to the recipient on or before January 31st
Form W-2 must be mailed or E-Filed to the SSA on or before January 31st
Note: The deadline is typically the next business day if the deadline falls on a weekend or federal holiday.
Failing to file Form W-2 by the deadline or meeting the deadline but providing incorrect recipient information can result in IRS penalties ranging from $60 to $630, depending on how late the form is submitted.
The IRS has increased these amounts for the 2024 filing year.
$60 per form
up to$220,500 per year (smaller businesses)
$630,500 per year
$120 per form
up to$630,500 per year (smaller businesses)
$1,891,500 per year
$310 per form
up to$1,261,000 per year (smaller businesses)
$3,783,000 per year
$630 per form
no maximum penalty
W-2 penalties may be subject to the following:
Discover more about IRS penalties by visiting the penalties breakdown.
According to IRS guidelines, employers must provide their employees with three copies: B, C, and 2. A total list of W-2 copies and their function include:
Copy to file with the SSA (if paper filing).
Copy to file with the State, City, or Local Tax Department.
Copy to be filed With Employee's FEDERAL Tax Return.
Copy for employee records.
Copy for employee’s State, City, or Local Income Tax Return.
Copy for employer records.
Since 2016, the Form W2 extension for filing with the SSA is no longer automatically granted. Instead, a 30-day extension is only allowed under specific circumstances. To request this extension, submit Form 8809, Application for Extension of Time to File Information Returns, as a paper filing and mail in the form to the address listed.
When filing Form 8809, provide a comprehensive explanation for the extension request and sign under penalties of perjury. Discover more about Form W2 Extensions.
Note: SSA recommends that payers utilize the e-file option over paper filing for faster processing and immediate updates.
IRS Form W-3, Transmittal of Wage and Tax Statements, is only required when the employer is opting to paper file. A Form W-3 is a transmittal or cover sheet that comes before the stack of W-2 forms. It provides the SSA with a summary of the information being filed. Employers should never file a Form W-3 by itself; it should always be accompanied by the corresponding Form W-2.
The form includes information about the filer, the total number of forms, and totals of all of the wages, withholding, and other amounts being filed.
For more information, check out this Essential W-3 Guide for 2024.
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BoomTax and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors prior to engaging in any transaction.
