If you’re an employer, knowing exactly when you’re responsible for distributing W-2 forms can help you avoid penalties and make sure your employees have everything they need to handle their tax obligations stress-free.
The W-2 is an important document for anyone who is regularly employed because without it, they cannot file their federal income tax return. It provides a breakdown of an employee’s wages and the amounts that were withheld for federal income tax, Social Security, and Medicare throughout the year.
Key takeaways
- Form W-2 details total wages paid and federal income tax, Social Security, and Medicare tax withheld. Employees need this form to file federal income tax returns
- The federal deadline for employers to provide Form W-2 to employees is January 31st of each year
- Missing the W-2 deadline incurs penalties that increase in proportion to the length of the delay
- W-2s can be delivered electronically or by mail but electronic delivery requires prior employee consent and mail delivery must meet the January 31st deadline
- Employees should expect W-2s by early February and Form 4852 can be used as a substitute if the W-2 isn’t received in time
In this employer’s guide, we break down when W-2s are due and when employees can expect to receive their forms, and we’ll also answer some common questions about this important tax document.
Key deadlines employers need to know for W-2 distribution
Simply put, employers are required by law to provide Form W-2 to all employees by January 31 of each year. This deadline makes sure employees have enough time to prepare and file their federal tax returns.
Employers must meet this deadline, as failure to do so can result in significant penalties; it also helps employees fulfill their tax obligations on time. While the federal deadline remains the same date, employers should note that there may be state-specific regulations or deadlines for W-2 distribution.
What happens if you miss the W-2 deadline
Failing to meet the W-2 form deadline can lead to unwelcome (and easily avoidable) attention from the IRS, typically in the form of fines. The exact amount of the penalty depends on how late the forms are filed, and they can add up quickly, especially for businesses with multiple employees. It’s also worth noting that providing W-2 forms late can rub employees the wrong way — which may lead to retention problems.
How employers can prepare for timely W-2 distribution
To make sure your W-2 filings are on time, being proactive goes a long way. While the exact process may vary from company to company, here are some typical steps.
- Payroll reconciliation: Start reconciling your payroll records well before the year-end W-2 deadline. This should include verifying the total wages paid to each employee and all applicable tax withholdings, including federal income tax, Social Security, Medicare, and state and local taxes.
- Verify employee data: Encourage your employees to review and update their personal information throughout the year, especially towards the end of the year, so the information appearing on their W-2s is accurate.
- Choose your filing method early: Decide whether you’ll distribute W-2 forms electronically or via mail, and prepare accordingly. Please note that electronic distribution requires prior approval from employees, so allow sufficient time for this process.
- Utilize payroll software: The right payroll software can automate a significant portion of the W-2 preparation and distribution process. This streamlines the process, typically reduces the risk of errors, and guarantees timely delivery.
For timely delivery of employee W-2 forms, keep tabs on deadlines, make sure all employee records are up-to-date, and finalize and distribute the forms as close to the end of the tax year as possible.
Pro tip
“If you’re sending employees their W-2s by mail, make sure you’re sending them to the correct address. Have employees confirm their addresses before you click send. Additionally, consider replacing employees’ social security numbers with asterisks (***-**-****) before mailing. The last thing you want is for an employee’s mail to get stolen with their Social Security number visible, as that could result in identity theft.”
— David Kindness, CPA and OnPay contributor
W-2 filing methods: choosing between electronic and mail delivery
Employers can distribute W-2 tax forms to their employees in two different ways:
- Electronic delivery: Though you need to get your employees’ consent first, you can provide Form W-2 electronically. It’s worth considering this option because it’s typically more efficient, secure, and generally more cost-effective. Employees can then access their W-2 forms at their convenience through a secure online portal.
- Mail delivery: If an employee doesn’t consent to electronic delivery, you’ll need to mail a paper copy of their Form W-2 (or hand it to them). Make sure you have the correct address on file for each mailed form, and be aware that the W-2 form mailing deadline is January 31, so it must be postmarked by that date.
When employees should expect their W-2s
Employees can generally expect to receive their W-2 forms by the first week of February. Some receive it sooner than that, depending on how quickly their employer generates and sends W-2s. Since employers must distribute these forms by January 31st, allow enough time for your W-2 to arrive via mail.
Why accuracy and proper recordkeeping are essential for W-2 compliance
It’s important to be accurate when you’re preparing W-2 forms. Incorrect information — like the wrong Social Security number, inaccurate earnings figures, or miscalculated withholdings — can lead to errors for both employees filing their tax returns and for the IRS in processing the information.
Errors like these can result in amended filings and potential penalties. The best way to avoid problems is to follow proper recordkeeping procedures throughout the year for accurate, trouble-free W-2 filings. A good payroll software can make this process easy and minimize the chances for errors to occur, reducing your stress and streamlining the W-2 creation process.
Avoiding and managing penalties for late or incorrect W-2s
Penalties for late or inaccurate W-2s can add up, and making sure you meet the W-2 deadline starts well before tax time. For best results, it can make sense to have thorough year-end reconciliation processes and take all necessary steps to verify employee information throughout the year.
“If you realize you’ve made an error on a W-2 form, it’s not the end of the world. You’ll want to correct it by filing Form W-2c, Corrected Wage and Tax Statement, as soon as possible. The IRS provides clear guidance on how to file corrected W-2 forms, and in cases of extenuating circumstances that may have prevented timely filing, you can request an extension.”
— David Kindness, CPA
It’s best to file on time to avoid potential issues and work hard to ensure you keep W-2 forms secure. Compromised W-2 forms containing sensitive employee information are considered data breaches and can lead to further complications and penalties. This can happen if employees’ mail containing Form W-2 is stolen or if a data breach allows unwanted access to W-2 information.
Knowing when W-2s are available keeps tax time worry-free
In addition to understanding how the payroll process works, ensuring your W-2 filings are timely and accurate can sometimes present a learning curve for a growing company. Because this document is critically important during tax time, getting it right goes a long way for you and your employees. OnPay’s HR and payroll software is designed with small business owners in mind, making it easy to accurately track wages, withholdings, and employee information all year long, so you’re ahead of the game when it’s time to prepare W-2s at the end of the year.
OnPay helps you stay compliant with IRS regulations and ensures that your employees receive their W-2 forms on time, making tax season smoother for everyone.
