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Form W-2 Filing Responsibilities for Employers

Payroll
Article
12/27/2018

As an employer, you have various responsibilities when it comes to filing Form W-2. You need to give a copy to the employee and one to the Social Security Administration. You may also have to send a copy to your state (or submit a state-generated form). Both must be done in an accurate and timely manner, or penalties may result. The upcoming filing season brings new deadlines and other rule changes that may make it even more difficult to file Form W-2 correctly and on time.

Form W-2 filing deadline

As an employer, you must furnish Form W-2 for 2018 compensation to all employees by Jan. 31, 2019. This filing deadline has not changed. What's more, you must transmit copies of W-2s to the Social Security Administration, along with Form W-3 (a transmittal summarizing the W-2s); the same due date applies. Some states requiring copies of W-2s have different deadlines.

Note: The same filing federal deadlines for Form W-2 apply for Form 1099-MISC issued to independent contractors reporting non-employee compensation in box 7. The transmittals of 1099-MISC are sent to the IRS (not the Social Security Administration).

Safe harbor penalty relief

There is safe harbor relief for e­­mployers regarding penalties from failing to file correct forms or failing to provide employees with correct statements. No penalties 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.

Form W-2 filing extensions

If you can't meet the January 31 due date, you can ask for a 30-day extension by filing Form 8809, Application for Extension of Time to File Information Returns, with the IRS by the filing due date. But this extension is not automatic. It will be granted only in "extraordinary circumstances or catastrophe." 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. On Form 8809 include 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.

SSN privacy

While the IRS has adopted new rules permitting Social Security numbers (SSNs) to be truncated for certain forms as a protection against identity theft (e.g., Form 1099-MISC for independent contractors), these rules do not yet apply to W-2s. Proposed regulations issued in 2017 would allow for truncating on forms filed after 2018, but instructions to Form W-2 for 2018 say not to truncate SSNs filed in 2019.

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.
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