The IRS requires employers to send W2 forms to employees by January 31st each year for the prior tax year. But if the deadline is missed, penalties could be assessed unless an extension is filed.
In this guide, you’ll learn about W2 forms, filing deadlines, extensions, late filing penalties, and when it’s necessary to contact a business tax professional.
What is a W-2 Form?
IRS Form W-2 (Wage and Tax Statement) is a federal tax document that shows the total amount of taxes withheld from an employee’s paycheck for the calendar year. Employees need W-2 tax forms to file state and federal tax returns.
It includes the following information:
- Employer identification number, name, address and zip code
- Employee’s first name, middle initial and last name
- Employee’s wages, tips, compensation and Federal income tax withheld
- Social security wages and Social security tax withheld
- Medicare wages, tips and Medicare tax withheld
- Social security tips
- Allocated tips
- Dependent care benefits
- Nonqualified plans
- Employer’s state ID number
- State wages, tips and state income tax
- Local wages, tips and local income tax
- Locality name
“Every employer engaged in a trade or business who pays remuneration, including non-cash payments of $600 or more for the year (all amounts if any income, social security, or Medicare tax was withheld) for services performed by an employee must file a Form W-2,” according to the IRS.
W-2 Filing Deadlines
Employers are required to file Form W-2s with the IRS and Social Security Administration (SSA) by January 31st of the following tax year. So, W-2s for the tax year 2021 are due on January 31st, 2022. If the filing deadline falls on a weekend, it shifts to the next business day.
Can Your Company Get in Trouble for Not Sending W-2 Forms to Employees?
If you fail to mail W-2 forms to employees by January 31st, you could incur steep penalties.
The Penalties for Employers Not Sending W-2 Forms
Below is a breakdown of penalties for late filing of W-2 forms. Be mindful that the fee schedule depends on the size of the business, as determined by gross receipts.
Form W-2 Late Filing Penalties for Small Businesses
Entities with gross receipts of $5 million or less are subject to the following penalties for returns due January through December 31, 2020:
- Not more than 30 days late – $50 per statement (limited to $194,500)
- 31 days late – August 1 – $110 per statement (limited to $556,500)
- After August 1 or no filing – $270 per statement (limited to $1,113,000)
- Intentional disregard – $550 per statement
Form W-2 Late Filing Penalties for Large Businesses
If the company’s gross receipts exceed $5 million, the penalty rates for returns due January through December 31, 2020 are as follows:
- Not more than 30 days late – $50 per statement (limited to $556,500)
- 31 days late – August 1 – $110 per statement (limited to $1,669,500)
- After August 1 or no filing – $270 per statement (limited to $3,339,000)
- Intentional disregard – $500 per statement
Form W-2: Incorrect Information Penalties
You could also incur penalties for failing to file correct information returns. Common errors include including or omitting an incorrect taxpayer identification number (TIN) and paper filings when electronic filings are mandatory. If you file paper forms that aren’t readable by the machine, your business could also be assessed penalties.
How to Deal with Form W-2 Penalties
Fortunately, the IRS permits extensions to avoid Form W-2 penalties. However, you must put in a request before the filing deadline.
Extension Applications for W-2s
IRS Form 8809 (Application for Extension of Time to File Information Returns) can be used to request a 30-day extension to file W-2 forms with the Social Security Administration. You can only submit the request once, and it must be mailed by January 31st. Electronic submissions are not permissible.
Suppose you anticipate furnishing W-2 forms to your employees beyond the January 31st deadline. In that case, you can also request an extension from the IRS in writing.
Mail all requests to:
- Internal Revenue Service
- Attn: Extension of Time Coordinator
- 240 Murall Drive
- Mail Stop 4360
- Kearneysville, WV 25430
Contact a Business Tax Professional
Is your business facing hefty penalties from the IRS for not filing W2s with the SSA or sending W2s to employees by the deadline? The IRS moves swiftly to enforce the tax code, and it can be challenging to resolve late W-2 filing penalties on your own.
If you’re unsure what to do next, a business tax professional can help. Consider these experts to help you resolve payroll issues like this one or other conflicts with federal and state tax authorities.
