What is Form W2? Understanding Its Purpose and Requirements

What is a W2 Form?

Form W2 is an annual tax form that employers must file for each of their employees to report the wages paid and federal and state taxes withheld from their paychecks to the Social Security Administration (SSA). The SSA will use the information reported on the W2 to determine the employee's social security benefits.

A copy of the W2 must be furnished to the respective employee, which they will use to complete their personal tax filing.

Who must file IRS Form W2?

As an employer, you must file Form W-2 if you’ve,

• Withheld any Income, Social Security, or Medicare taxes from your employee wages, regardless of the
  wage amount.
• Paid $600 or more in wages to any employees even if there was no withheld Income, Social Security, or
  Medicare taxes.

Note: Wages paid to contractors or other non-employees are not reported in W2. You must file a 1099 form instead. Learn more

What information must be reported on a W2 Form?

To complete your W2 form, you’ll need the following major information,

• Employer information: Provide basic information, such as name, TIN, and address.
• Employee information: Provide the employee’s basic information, such as their name, TIN, and address.
• Wage information: Provide a detailed breakdown of wages paid to the employee. This includes,
• Total wages, tips, and other compensation paid
• Wage amount subject to employee Social Security tax (excluding Social Security tips and allocated tips)
• Social Security tips
• Medicare wages and tips
• Allocated tips
• Dependant care benefits
• Federal taxes withheld: Provide a detailed breakdown of taxes withheld from the employee wages. This includes,
• Federal income tax withheld
• Social Security tax withheld
• Medicare tax withheld
• State information: Based on where your business operates, and the employee resides, you may need to report certain state-specific information, such as the employer’s state ID number, state income, and state income
  tax withheld.

Refer to our W2 instructions guide for more detailed information.

What are the different copies of the W2 tax form?

Form W2 comprises multiple copies, each of which serves a different purpose.

• Copy A (Employer) - To be sent to Social Security Administration
• Copy 1 (Employer) - To be sent to City, State, or Locality
• Copy B (Employee) - To be filed with the employee’s Federal Tax Return
• Copy C (Employee) - For employee's records
• Copy 2 (Employee) - To be filed with the employee’s State, City, or Local Income Tax Return
• Copy D (Employer) - For employer's records

When is the deadline to file form W2?

The deadline for employers to file Form W2 with the SSA either by paper or electronically for the 2024 tax year is
January 31, 2025. Employers must also furnish copies of Form W-2 to their employees by the same date.

Here’s an overview of Form W-2 deadlines for the 2024 tax year:

Are there any penalties for late filing of Form W2?

Yes. If you fail to file a W-2 on time or haven’t filed at all, the IRS will impose late filing penalties for the W-2 form, which ranges between $60/form to $660/form.

The penalty amount varies depending on how late the form is filed. Here is the overall breakdown of
W2 penalties for the 2024 tax year.

Avoid costly IRS penalties by ensuring your Form W-2 is filed accurately and on time. Learn more about W-2 Penalties.

Is there an option to request an extension to file the W2 form?

You can request an extension of time to file Form W-2 with the SSA by submitting Form 8809 (Application for Extension of Time to File Information Returns) with the IRS. You must submit this request before the due date of the W-2 form.

If the IRS approves your request for an extension, you will receive an additional 30 days to file. Note that the IRS grants extensions for filing W2 forms only in specific cases, such as a natural disaster or a fire that destroys the necessary records for filing. No further extension of time will be provided.

Note: 8809 grants an extension only to file your W-2. If you need an extension to furnish recipient copies, you can use Form 15397 or send a letter to the IRS.

How to file Form W2 for the 2024 tax year?

To file Form W-2 for the 2024 tax year, follow these steps:

• Gather information: Collect all necessary information for your employees, including their names, addresses, SSNs, and total annual earnings.
• Complete the form: Fill out the W2 forms with the required information
• Employee's Social Security number
• Employer's information (name, address, EIN)
• Total wages, tips, and other compensation
• Total wages, tips, and other compensation
• Federal income tax withheld
• Social Security tips and tax withheld
• Medicare wages, tips, and tax withheld
• State and local income tax withheld
• File with the SSA: File the W2 forms to the SSA by January 31, 2025, either by paper or electronically, to avoid penalties. The IRS mandates that you e-file W-2 if you are filing 10 or more returns in a calendar year. If you are filing by paper, you may need to fill out additional forms like Form W-3 (transmittal form). Paper filing causes processing delays and significantly increases the risk of errors.
• Distribute to employees: Provide copies of the completed W2 forms to your employees by January 31, 2025. Employees will need these for their tax returns.
• Keep records: Maintain copies of all W2s and related documents for your records for at least four years.

Where to mail Form W2 paper copies?

If you are eligible to file W-2 on paper, send paper copies (Copy A) of Form W2 and W3 to the following address:

Social Security Administration
Direct Operations Center
Wilkes-Barre, PA 18769-0001

No payments such as cash, checks, money orders, or other forms of payment must be mailed with the W2 and W3 forms.

Check out our Form W-2 Mailing address for more information on this.

Simplify your Form W2 E-filing with TaxBandits!

TaxBandits, an IRS-authorized e-file service provider, offers a secure solution for e-filing Form W2 with the SSA and states. Our user-friendly software simplifies the e-filing process, allowing you to stay tax-compliant in just a few steps:

• Step 1 : Create your free account and select Form W2 from the dashboard.
• Step 2 : Enter the required Form W2 information.
• Step 3 : Review the form and transmit it to the SSA and state.
• Step 4 : Choose postal mailing or an online access portal for recipient copy distribution.

Want to e-file W-2 with the SSA and states? Get started with TaxBandits today.

Article Sources:

• https://www.irs.gov/instructions/iw2w3
• https://www.irs.gov/pub/irs-pdf/fw2.pdf