Form W-2 Penalties

Form W-2 penalties

Employers have to provide Form W-2 to their employees that are correct and timely. Upon failing to file on time, the IRS charges penalties for the employer.

Table of Content

Why are penalties charged?

There are a number of reasons an employer can be charged with penalties.

Late Filing
  • Failing to file W-2 on time
Filing with incorrect information
  • Missing TIN
  • Missing necessary information
Failing to give the required information
  • Incorrect TIN
  • Incorrect information
Wrong filing method
  • Filing by paper when need to e-file
  • Filing forms that are not machine-readable
Failing to provide employee copies
Fraudulent filing

What are the penalty rates?

The penalty rates are determined by the IRS based on the delay in time to file and the size of the business. Here is the overall breakdown of penalty rates.

Time limit Minimum Maximum
Filed within 30 days $50 /form $556,500 per year ($194,500 for small businesses)
After 30 days and before August 1 $110 /form $1,669,500 per year ($556,500 for small businesses)
After August 1 $270 /form $3,339,000 per year (1,113,000 for small businesses)
For intentional disregard of failing to file and incorrect payee statements - $550 per statement
For fraudulent filing - $5000 or more

Are there any penalties for not filing with the State?

There are states that require you to report Form W-2 with the State. Failing to file with the state might again result in penalties. These State penalties are to be paid in addition to the Federal penalties. The penalty rates will vary for each state and it depends upon when you actually file your return.

You can check penalties of the respective states from State Filing Requirements.

How to avoid Form W-2 penalties?

It is indeed a self-credit to do your filing error-free. It is never hard to achieve. Here are simple ways to avoid penalties.

  • Do your tax filing on time
  • Send employee copies on time
  • Be aware of the right filing method
  • Choose the right Form
  • Fill the entries correctly
  • Always double check TIN
  • Crosscheck all the entries once you fill the form
  • Never miss filing any necessary information
  • Never do want shouldn’t be done
  • Never take tax filing easily - it is your duty

It is not too late to file your W2s!

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