Frequently Asked Questions About W-2 and W-2c

Who needs to file a W-2?

Employers must file Form W-2 for wages paid to each employee from whom income, Social Security, or Medicare tax was withheld.  Employers must also file Form W-2 for wages paid to each employee from whom income tax would have been withheld if the employee had claimed no more than one withholding allowance or had not claimed exemption from withholding.  Lastly, every employer engaged in a trade or business who pays for services performed by an employee, including noncash payments, must file a Form W-2 for each employee.

Who needs to file a W-2c?

Form W-2c must be filed by employers to correct errors on Forms W-2 that have been filed with the Social Security Administration.

What is each copy of Form W-2 (W-2c)? 

Copies A, 1, and D are for the employer, and copies B, 2, and C are for the employee.  

What is the filing process for Form W-2 (W-2c)?

Employer copies (A, 1 and D):  Following the detailed instructions provided by the Internal Revenue Service, submit Copy A to the Social Security Administration either on paper or electronically; submit Copy 1 either on paper or electronically to the state, city, or local tax department, if applicable; and keep Copy D as the employer’s file copy.

Employee copies (B, 2, and C): Copy B is provided to the employee and is to be filed with the employee’s federal income tax return.  Copy 2 is provided to the employee and is to be filed with the employee’s state, city, or local income tax return, if applicable; and Copy C is kept with the employee’s records. 

If an error is discovered on Form W-2 after it has been submitted to the Social Security Administration, Form W-2c should be completed to correct the error, following the detailed instructions provided by the Internal Revenue Service.  Use the same process for Form W-2c as for Form W-2 when creating and distributing copies to each agency and employee.

What if I discover an error after I filed Form W-2 with the Social Security Administration?

If you discover an error after you file Form W-2 with the Social Security Administration, file Form W-2c either electronically or on paper to correct errors on Form W-2. 

Do I have to use Form W-2c if I discover an error before Form W-2 is filed with the Social Security Administration?
If an error is detected on Form W-2 after issuing the form to the employee, but before it is filed with the Social Security Administration, it is not necessary to use Form W-2c.  Simply check the “Void” box at the top of the incorrect Form W-2 on Copy A, and prepare a new Form W-2 with the correct information.  Send Copy A to the Social Security Administration.  On copies B, C and 2 (employee copies), write “CORRECTED” on the new copies and issue them to the employee.   

How do I know if I have the latest version of Forms W-2c and W-3c?

The current revision date for both Forms W-2c and W-3c is 2-2009.  

How long must employers keep Forms W-2 on file?

Employers must keep Copy D of Forms W-2 for four years.

What penalties are associated with W-2 reporting?

If you fail to file a correct W-2 by the due date, and cannot show reasonable cause, you may be subject to a penalty.  Penalties apply for:
  • Failing to file on time
  • Failing to include all required information
  • Failing to meet electronic filing requirements
  • Failing to file compliant paper forms
  • Or,  failing to include correct information

The amount of the penalty is based on when the W-2 is filed:

  • $15 per Form W-2 if filed correctly within 30 days of the due date.  The maximum penalty is $75,000 per year ($25,000 for small businesses).
  • $30 per Form W-2 if filed correctly more than 30 days after the due date but by August 2.  The maximum penalty is $150,000 per year ($50,000 for small businesses).
  • $50 per Form W-2 if you file after August 2 or you do not file the required Forms W-2.  The maximum penalty is $250,000 per year ($100,000 for small businesses).
  • If failure to file a correct Form W-2 is due to intentional disregard of the filing or correct information requirements, the penalty is at least $100 per Form W-2 with no maximum penalty.

Why are Forms W-3 (W-3c) not required when filing electronically?

When filing electronically, the information normally reported on Form W-3 (W-3c) is already part of the W-2 (W-2c) e-file submission in the total records portion of the file.
 

Filing Prior Year W-2s: How do I do this?

The entries on Form W-2 must be based on wages paid during the calendar year.  If filing prior year information electronically, follow your software provider’s instructions for filing previous year information.

If filing a prior year W-2 on paper, the year printed on Form W-2 must match the year for which the wages were paid.  Also file the prior year Form W-3 that matches the year of the Forms W-2 being filed.
 
 
 

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