Form W-2: The Employer's Guide to Filing

Who Must Issue a W-2?

Any employer who paid an employee $600 or more during the year must issue a W-2. The threshold doesn't apply to withholding: if you withheld any federal income tax, Social Security, or Medicare tax from an employee's wages, you must issue a W-2 regardless of how much they earned.

The W-2 applies only to employees. Workers classified as independent contractors receive Form 1099-NEC instead. Misclassifying employees as contractors is one of the more consequential payroll mistakes a business can make, and it surfaces directly at W-2 time.

What Information Goes on a W-2?

The W-2 captures a detailed picture of each employee's compensation and withholding for the year. Box 1 reports total taxable wages, tips, and other compensation. Box 2 shows federal income tax withheld. Boxes 3 and 4 cover Social Security wages and the Social Security tax withheld. Boxes 5 and 6 do the same for Medicare. Box 12 uses letter codes to report items like employer-sponsored health coverage, contributions to retirement plans, and other specific compensation categories. Box 13 includes checkboxes for statutory employee status and retirement plan participation, both of which affect how the employee files their return. State and local tax boxes appear at the bottom for employers in states with income tax withholding requirements.

W-2 Deadlines: When Employers Must File

January 31 is the deadline for both sending W-2s to employees and filing Copy A with the Social Security Administration, whether you're filing on paper or electronically. There's no separate window for the SSA filing. Both happen on the same date.

Employers filing 250 or more W-2 forms are required to e-file. When submitting to the SSA, W-2s are transmitted alongside Form W-3, the Transmittal of Wage and Tax Statements, which summarizes the totals across all W-2s filed.

W-2 Penalties for Employers

Penalties are assessed per form and scale with how long the error goes uncorrected. Forms corrected within 30 days of the January 31 deadline carry a $60 penalty per form. Forms corrected after 30 days but by August 1 carry a $120 penalty per form. Forms corrected after August 1, or never corrected, carry a $310 penalty per form. Intentional disregard of the filing requirement raises the penalty significantly with no cap.

These penalties apply separately for failing to furnish W-2s to employees and for failing to file with the SSA. A single error on a single form can therefore generate two separate penalties.

Common W-2 Errors and How to Correct Them

The most frequent W-2 errors involve incorrect Social Security numbers, wrong wages or withholding amounts, incorrect employer EINs, and missing or incorrect Box 12 codes. When errors are discovered after filing, employers must file a W-2c (corrected W-2) along with a W-3c (corrected transmittal form) to the SSA. Corrected copies also go to the affected employee. The sooner errors are caught and corrected, the lower the penalty tier.

Wrong SSNs are worth particular attention because they affect the employee's Social Security earnings record, not just their tax return.

How Slash Supports Employer Payroll Recordkeeping

Accurate W-2s are a direct output of accurate payroll records maintained throughout the year. Every wage payment, tax deposit, and net payroll disbursement needs to be clearly documented well before January arrives. A Slash business bank account keeps all payroll-related transactions organized and visible in real time, so the figures that go on each W-2 are already accounted for rather than reconstructed under deadline pressure.

Clean transaction records also make it easier to catch discrepancies early, before they become W-2 errors that trigger correction filings and penalties.