W-2 forms are crucial when the employees file their tax returns to the Internal Revenue Service and keep track of their monthly to annual employee wages as well as the amounts withheld for benefits and taxes. This particular tax form contains the important details of your company or business and the information about your employees, including the wages they’re getting from the services they do for you.
It also includes the amount you withhold for the taxes of your employees as specified on their W-4 forms. You can also add to that form the medicare tax contribution that you paid for them, plus social security and even their special and retirement benefit plans. To learn more about it, please read this entire article as we dig deeper into the Form W-2 employer responsibilities that you should know about.
Preparing the W-2 Forms
To make sure that an employee files the tax return to the IRS on the schedule, the agency will require the employers to prepare the W-2 forms and distribute them to their employees on or before the 1st of February. Doing so will give an employee enough time to let the IRS do their job to verify their tax returns, send additional copies to the SSA or the Social Security Administration, and even to the state-level administration, in some cases. Pro tip: If your employee is actual a contractor, then you’ll have to file a Form 1099 instead of a W2.
Filing Copies of the W-2 Forms
If you are an employer, you should file Copy A of this W 2s tax form to the Social Security Administration on the 31st of January. But if this date falls on weekends or on legal holidays, you will file these forms on the next business day. Besides that, as an employer, it’s also your responsibility to provide your employee with Copies B, C, and two of the W-2 Forms on the 31st of January.
Moreover, you have to keep in mind to comply with these requirements if you withhold the social security, income, or Medicare taxes of your employees. Also, you would have taxes withheld from your employees’ income if they haven’t claimed the exemption from W-4 form withholding or had only claimed one withholding allowance. These type of withholdings are commonly known as trust fund taxes.
You may all be aware of the fact that payroll providers or the payroll staff of the companies or businesses will file and send the W 2s to your employee on your behalf as an employer. However, you should also know that it’s your ultimate responsibility to make sure that all of your employees have successfully received and filed the W 2s on the deadlines set by the IRS.
Submitting the Form W 2 on Time
The IRS always has a specific filing deadline for any form needed for filing the tax return during the tax year. But if you, as an employer, failed to submit this form on time, there will be consequences and penalties that you need to deal with the agency. The IRS gives different penalties to those who failed to file on the due date based on the size of their company or business. The agency considers a “small business” small if the average annual gross is $5 million or less than that in the most recent 3 tax years.
In addition, if you are late up to 30 days on your filing, penalties apply to $50 per form with a maximum penalty for all small businesses with $197,500 and $565,500 for others. But if you will submit the said form after 30 days and it will be before the 1st of August, the IRS may impose a fine per W-2 form of $110 with the maximum penalty of $565,500 for all small businesses and it will be $1,696,500 owners of larger businesses.
However, for any submissions of the W 2s on or before the 1st of August, the monetary penalty will increase to $280 per form and it has a maximum penalty of $1,130,000 for small business owners and $3,392,000 generally.
W-2 Form Replacement for the Lost Form
Whether your form W 2 ended in the trash accidentally or your dog played with them because it thought you bought a new toy, losing these tax forms will not be the end of your world. So if in any case, you lost your W 2s, employers should provide you with another one. But you also have to know that employers have permission to charge you a nominal amount for the form replacement service.
You have to make sure to ask for the replacement as soon as possible for you to file your taxes to the IRS by the filing deadline given to you within the tax season. Some employers may issue you again a new from W 2 immediately after filing your request to their office. But based on the regulations of the agency, it only requires the employers to process the said replacement of the form within a reasonable amount of time. Depending on the size of the company, business, or organization, it may take a few days to a few weeks before you will receive the W-2 form replacement. So you have to make sure to request for a new form as quickly as possible so that you can still file your tax returns in a timely manner and avoid any possible violations and penalties for late submissions.
Undeliverable Employee’s W-2
If you, as an employer, sent the form W 2 to your employees’ addresses but it turned out the addresses on your file were undeliverable, you have 30 days to give your employee the notice either by mail or in person. In cases like these, the thing you should do is to keep these forms in your company records for 4 years. There’s no need to forward those forms to the SSA or the Social Security Administration.
Moreover, while the Internal Revenue Service doesn’t give you any specified instructions on how to handle undeliverable form W 2, you should exert a reasonable effort to fulfill your responsibility as an employer. However, if you have any concerns to do your part or any issues while doing so, you can always reach out to any tax professional in your area for help and further assistance.
