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Earlier Filing Deadline and Other Changes Coming for W-2s

Payroll
Article
09/06/2016

As an employer, you have two responsibilities with respect to Form W-2. You need to give a copy to the employee and one to the Social Security Administration. Both must be done in an accurate and timely manner, or penalties may result. And in the upcoming filing season, there are new deadlines and other rule changes that may make it even more difficult to file Form W-2 correctly and on time.

Deadline

As an employer, you must furnish a W-2 for 2016 compensation to an employee by January 31, 2017. This filing deadline has not changed. However, there is a new deadline for transmittal of copies of W-2s to the Social Security Administration.

In the past, IRS Form W-3, Transmittal of Wage and Tax Statements, along with copies of W-2s, were required by February 28 (or March 31, if submitted the forms electronically). The PATH Act, signed into law last December, changed the deadline for the 2017 filing season for 2016 forms. Form W-3 must be filed with the Social Security Administration by the same date as W-2s are furnished to employees: January 31. This deadline applies whether filing by paper or electronically.

Form W-3 must be filed by January 31.

Because of the earlier filing deadline, there is new safe harbor relief for employers regarding penalties from failing to file correct forms or failing to provide employees with correct statements. No penalties will apply and no corrected W-2 is necessary if no single amount in error differs from the correct amount by more than $100 and no single amount reported for tax withheld differs from the correct amount by more than $25.

If this special safe harbor does not apply, you can still limit penalties considerably if you fall under the de minimis rule for corrections. You must meet all of the following conditions:

  • You filed W-2s before the filing due date;
  • You failed to include the information required or included incorrect information; and
  • You submit corrected forms by August 1.

Extensions

Previously, if you could not file with the Social Security Administration by the old deadline, you could obtain an automatic 30-day extension by submitting Form 8809, Application for Extension of Time to File Information Returns, to the IRS by the filing due date. You could also ask for an additional 30-day extension.

Today, the automatic filing extension for W-2s has been eliminated. Now, there's only a non-automatic 30-day extension. This extension will be granted only in "extraordinary circumstances or catastrophe." Thus, you may get a favorable response to an extension request if you suffer a natural disaster, such as a hurricane, flood, tornado, or your books and records are destroyed by a fire. The application for the extension is made on Form 8809, along with an explanation for the reason why additional time is needed. The application must be signed under penalty of perjury.

The failure to timely file the forms triggers a late filing penalty. The longer the delinquency, the higher the penalty which may result.

Conclusion

Be sure to comply with the new filing deadline. The penalties for failing to file correct W-2s by the due date have increased, although safe harbor relief may apply. Note: The same filing deadlines for Form W-2 apply for Form 1099-MISC issued to independent contractors receiving payments of $600 or more in the year. The transmittals of 1099-MISC are sent to the IRS (not to the Social Security Administration).

 

barbara weltman

Barbara Weltman is a tax and business attorney and the author of J.K. Lasser's Tax Deductions for Small Business as well as 25 other small business books. She has been named a Small Business Influencer for five years in a row.

This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.
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