Frequently Asked Questions - Form W-2

What is a form W-2? A W-2 Wage and Tax Statement is a form where employers report employees annual earnings and taxes withheld at the end of each year. The employer is required to send a copy of the completed W-2 Wage and Tax Statement to both the employee and SSA. Who must file a form W-2? Every employer engaged in a trade or business who pays remuneration, including noncash 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 for each employee (even if the employee is related to the employer) from whom:

Income, social security, or Medicare tax was withheld. Income tax would have been withheld if the employee had claimed no more than one withholding allowance or had not claimed exemption from withholding on Form W-4, Employee's Withholding Allowance Certificate.

Who is required to E-file Form W-2? You are required to E-file Form W-2 if you have 250 or more forms to file. If you are required to e-file and fail to do so, you may incur a penalty from the SSA. What are the Due Dates Associated with form W-2? The employer must furnish a copy of their completed W-2 form to each employee by January 31 of the year following the year in which the W-2 is in reference to. For the 2012 tax year the due date is January 31, 2013. The employer is required to file Copy A of all W-2 forms along with a form W-3 with the SSA (Social Security Administration) by the last day of February of the year following the year in which the W-2/W-3 is in reference to if the forms are paper filed. If the forms are e-filed, the due date is automatically extended to the last day in March of the year following the year in which the W-2/W-3 is in reference to (for the 2012 tax year, the due date is April 1, 2013 because March 31, 2013 falls on a weekend). Is There an Extension Form Available for filing form W-2? You may request an automatic extension of time to file Form W-2 with the SSA by sending Form 8809, Application for Extension of Time to File Information Returns, to the address shown on Form 8809. You must request the extension before the due date of Forms W-2. You will have an additional 30 days to file. This extension form does not extend the January 31 due date to furnish the W-2 form(s) to your employees - there is a different process for this.

How do I Gain an Extension of Time to Furnish Forms W-2 to Employees? You may request an extension of time to furnish Form W-2 to employees (for 10 or less payers) by sending a letter to: Internal Revenue Service Information Returns Branch, Mail Stop 4360 Attn: Extension of Time Coordinator 240 Murall Drive Kearneysville, WV 25430 Mail your letter on or before the due date for furnishing Forms W-2 to employees. It must include: Your name and address, Your EIN, A statement that you are requesting an extension to furnish Forms W-2 to employees, The reason for delay, and Your signature or that of your authorized agent. What is a form W-3? A form W-3 is filled out by the employer to report all wages, tips and other compensation paid to its employee(s) as well as all the taxes withheld. This form includes the total amount for all the employees under the employer during the tax year. A form W-3 Transmittal of Wage and Tax Statements is completed only when a paper Copy A of Form(s) W-2 is being filed. Even if there is only one paper W-2 form being filed a W-3 is still required. There is no reason to file form W-3 alone. There is also no need to file a form W-3 for Form(s) W-2 that were submitted electronically to the SSA. Am I required to file Form W-3 when e-filing? No, if you are filing your W-2 forms electronically a separate W-3 form is not needed. What Information is Included on a form W-2? Various information is listed on the W-2 form including the employers EIN number and contact information, employees social security number and contact information and detailed information related to any salary or wages paid to the employee by the employer along with taxes withheld throughout the year. Where do I Find the Information I Need to Fill Out Form W-2? The information needed to fill out form W-2 for your employees can typically be

located on your quarterly federal 941 returns and 943 returns. What are the Uses of the Different Copies of the form W-2? When an employer prepares the form W-2 there will be six copies of the form generated. Details of each copy and its uses are as follows: Copy A For Social Security Administration - This page must be submitted along with Form W-3 to the Social Security Administration. Copy B - To Be Filed With Employees FEDERAL Tax Return. This copy goes to the employee to furnish to the IRS along with their federal tax return. Copy C - For EMPLOYEES RECORDS. This copy goes to the employee to keep for their personal records. Copy D - For Employer. This copy is retained by the employer for record keeping purposes. Copy 1 - For State, City or Local Tax Department. This copy stays with this employer to be submitted or for record keeping purposes regarding state, city or local taxes where applicable. Copy 2 - To Be Filed With Employees State, City or Local Income Tax Return. This copy goes to the employee to be furnished along with their state income tax returns where applicable. What can I do if an employee loses the Form W-2? If an employee loses a Form W-2, write REISSUED STATEMENT on the new copy and furnish it to the employee. You do not have to add REISSUED STATEMENT on Forms W-2 provided to employees electronically. Do not send Copy A of the reissued Form W-2 to the SSA. Employers are not prohibited (by the Internal Revenue Code) from charging a fee for the issuance of a duplicate Form W-2. When Am I Required to Furnish Form W-2 to my Employee if Employment ends before the end of the Year? You may provide form W-2 to the employee at any time after employment ends, but no later than January 31 of the year following the tax year associated. If an employee asks for form W-2, give them the completed copies within 30 days of the request or within 30 days of the final wage payment, whichever is later. When Do I Furnish Form W-2 to my Employees If the Business Itself is closed? If you terminate your business, you must provide Form W-2 to your employees for the calendar year of termination by the due date of your final Form 941, 944, or 941SS. You also must file Form W-2 with the SSA by the last day of the month that follows the due date of your final Form 941, 944, or 941-SS. What are the Penalties Associated with Not Filing Correct Information Returns by the Due Date? If you fail to file a correct Form W-2 by the due date and cannot show reasonable cause, you may be subject to a penalty as provided under section 6721. The penalty

applies if you: Fail to file timely, Fail to include all information required to be shown on Form W-2, Include incorrect information on Form W-2, File on paper forms when you are required to e-file, Report an incorrect TIN, Fail to report a TIN, or Fail to file paper Forms W-2 that are machine readable.

The amount of the penalty is based on when you file the correct Form W-2. The penalty is: $30 per Form W-2 if you correctly file within 30 days (by March 30 if the due date is February 28); the maximum penalty is $250,000 per year ($75,000 for small businesses, defined on page 11). $60 per Form W-2 if you correctly file after 30 days beyond the due date but by August 1, 2013; the maximum penalty is $500,000 per year ($200,000 for small businesses). $100 per Form W-2 if you file after August 1, 2013, or you do not file required Forms W-2; the maximum penalty is $1,500,000 per year ($500,000 for small businesses). How do I Report Wages for a Deceased Employee? If an employee dies during the year, you must report the accrued wages, vacation pay, and other compensation paid after the date of death. Also report wages that were available to the employee while he or she was alive, regardless of whether they actually were in the possession of the employee, as well as any other regular wage payment, even if you may have to reissue the payment in the name of the estate or beneficiary. If you have made the payment after the employee's death but in the same year the employee died, you must withhold social security and Medicare taxes on the payment and report the payment on the employee's Form W-2 only as social security and Medicare wages to ensure proper social security and Medicare credit is received. On the employee's Form W-2, show the payment as social security wages (box 3) and Medicare wages and tips (box 5) and the social security and Medicare taxes withheld in boxes 4 and 6. Do not show the payment in box 1. If you have made the payment after the year of death, do not report it on Form W-2,

and do not withhold social security and Medicare taxes. Whether the payment is made in the year of death or after the year of death, you also must report it in box 3 of Form 1099-MISC, Miscellaneous Income, for the payment to the estate or beneficiary. Use the name and taxpayer identification number (TIN) of the payment recipient on Form 1099-MISC. However, if the payment is a reissuance of wages that were constructively received by the deceased individual while he or she was still alive, do not report it on Form 1099MISC. What is the Military Spouses Residency Relief Act (MSRRA)? Under MSRRA, the spouse of an active duty service member (civilian spouse) may keep his or her prior residence or domicile for tax purposes (tax residence) when accompanying the service member spouse, who is relocating under military orders, to a new military duty station in one of the 50 states, the District of Columbia, or a U.S. possession. Before relocating, both spouses must have had the same tax residence.