How to Fill Out a W-2 Form

Both businesses and workers need to know about the IRS Form W-2. Employees use the forms to record paid payroll taxes, and the IRS utilizes them to figure out how much tax is owed if any, and whether or not employees are entitled to a refund.

In this guide, we’ll go through the fundamentals of how to fill out a W-2 Form.

Employer Instructions for Filling Out a W-2 Form

Although there are several versions of Form W-2, they are all identical. So, after you’ve completed one, you can copy and paste the information into the others. If you’re writing, use black ink or, if you’re typing, Courier font, 12-point if feasible. Double-check that you’ve used decimal points. Use dollar signs sparingly.

The form is brief, but it contains a lot of information. Make sure you follow the instructions.

Boxes A–E

• Box a: Enter the employee’s Social Security number in box a. (New for 2021: On employee Copies B, C, and 2, you may truncate this, but on Copy A, you must use the complete SSN.) The W-2 is divided into six copies, each of which must be sent to a separate recipient. Later, we’ll go through this in further depth.
• Box b: Type in your company’s EIN.
• Box c: Enter the name and address of your company. Fill out Forms 941, 941-SS, 943, 944, CT-1, or Schedule H with the same information (Form 1040 or 1040-SR). In return addresses, avoid using commas or periods.
  • You input your information instead of the employers if you are an agent managing taxes for another company and have an authorized Form 2678, Employer/Payer Appointment of Agent.
• Box d: You may insert control numbers here if you use them for payroll reasons. If not, leave it blank.
• Box e: Fill in the employee’s name as it appears on their Social Security card in boxes e and f. (which should be on their W-4). If their whole last name and first and middle initials won’t fit, use their first and middle initials instead. Use no commas or periods when inputting the address.

Boxes 1–9

• Box 1: Enter total salaries earned for the year, including gratuities, taxable perks, and employer payments to long-term care benefits, among other things. An entire list may be found in the IRS Form W-2 instructions. Elective deferrals, such as contributions to a 401(k), are not included (k). This information may be found on pages 16-17.
• Box 2: Enter the total federal income taxes withheld for the year, including the 20% excise tax on excess parachute payouts, if any.
• Box 3: Separate Social Security and allotted tips before filling out Box 3. Then, omitting Social Security and allocated tips, enter the total earnings paid before payroll deductions that are due to employee Social Security tax. Signing bonuses, employee and employer payments to health savings accounts and other income as specified in the instructions should all be included.
  • Boxes 3 and 7 can’t add up to more than $142,800.
  • Because no deductions are made here, the number in this box might be higher than the amount in box 1.
• Box 4: Enter the entire amount of Social Security tax deducted from the employee. It should not surpass $8,853.60 in 2021.
• Box 5: Fill in the total amount of earnings and tips that are subject to Medicare taxes. This is the sum of boxes 3 and 7, and there is no end to it.
• Box 6: Fill in the entire amount of Medicare tax withheld in Box 6. Include extra Medicare payments if your employee earned more than $200,000 and paid them. Your share should not be included.
• Box 7: Enter your employee’s tips, even if you didn’t collect Social Security tax on them. Boxes 3 and 7 can’t add up to more than $142,800.
• Box 8: Show tips allocated to staff in Box 8 if you own a restaurant. Boxes 1, 3, 5, and 7 should not contain this amount.
• Box 9: This box is now obsolete. Leave it empty.

10–20 boxes

• Box 10: List any child-care deductions your employee receives, including the fair market value of a daycare facility you support.
• Box 11: Enter any payments your employee received from a nonqualified plan (such as a retirement plan) or a nongovernmental section 457(b) plan. If they get more than one, add up the total. Any delayed sums recorded in boxes 3 and 5 are not included.
• Boxes 12a-d: Fill in the blanks with the appropriate codes. You may input them in any order you choose, but you don’t have to fill out every field if a code doesn’t apply. Details may be found on Page 30 of the IRS Form W-2 instructions.
  • Uncollected Social Security or RRTA tax on tips (Code A).
  • Uncollected Medicare tax on tips (Code B)
  • Code C: The cost of group-term life insurance that exceeds $50,000 is taxable.
  • Elective deferrals and ROTH contributions are coded D through H, S, Y, AA, BB, and EE.
• Box 13: Check the boxes that apply in box 13. For further information, see page 22 of the IRS Form W-2 instructions.
  • Statutory employee: Their wages are taxed by Social Security and Medicare but not by the federal government.
  • If the employee was a regular contributor to a pension, annuity plan, SIMPLE retirement plan, or other qualifying retirement plans.
  • Check whether you’re filling out the form for an insured employee as a third-party sick pay payer or if you’re reporting sick pay payments made by a third party.
• Box 14: Include any additional information you’d want to leave with your employee, such as the lease on a corporate vehicle, disability insurance taxes paid, union dues, educational assistance payments, and so on. A comprehensive list may be found in the IRS Form W-2 instructions. This box may be found on Page 22.
• Box 15: Fill in the information for state and local taxes in boxes 15 through 20. Use the state abbreviations with two letters and the employer’s state ID number. If you’re reporting on more than one state, use the broken line to divide them.

W-2 Forms and How They Work

Wage-earners (as opposed to contractors) who earn more than $600 should get a W-2 form at the start of the year. The document lays out an employee’s earnings, withholdings, FICA (Federal Insurance Contributions Act) taxes, and other income and deductions you handled over the previous year via payroll. They use it to submit their own taxes, whether they owe money or are due to a refund.

Employers transmit copies of the form to the IRS through the Social Security Administration in the meanwhile (SSA). This form is used by the federal government to keep track of taxes withheld in order to figure out how much money it should be getting in taxes. Because your employer taxes include Social Security and Medicare payments that match the FICA taxes your workers owe, you may use parts of this form to fill out your Form 941 or Form 944.

Who Needs to Complete a W-2 Form?

You may need to fill out a Form W-2 if you paid at least one employee’s pay (cash or non-cash). (This includes family who works with you.) If any of the following criteria apply to the employee, you must provide a W-2 Form:

• Regardless of how much your workers earned, you withheld income or FICA taxes.
• If the employee had not claimed exemption from withholding on Form W-4, you would have had to withhold the taxes.
• Even if you did not withhold any income or FICA taxes, you paid the employee $600 or more that year.

When Do W-2 Forms Have To Be Filed?

W-2s are tax documents that are sent to both the government and your workers each year. Employees should get their Copies B, C, and 2 by January 31 of the year after the tax year—for example, employees should receive their forms by January 31, 2022, for the tax year 2021. Copy A of the Form must also be submitted with the SSA by January 31st, either online or by mail.

Requesting a Deadline Extension

By completing Form 8809, Application for Extension of Time To File Information Returns, you may request a filing extension from the Social Security Administration. Submit a letter to the IRS requesting an extension to send W-2 forms to workers. You must have valid grounds for the delay. Details may be found on pages 6 and 7 of the Form W-2 Instructions.

How Should W-2 Forms Be Filled Out?

By enrolling for SSA’s Business Services Online, you may file online. Employers, CPAs, accountants, and enrolled agents may use this service to file W-2s and W-2Cs for free. It also allows you to check current and previous workers’ names and Social Security numbers. When you file online, the office generates the W-3 for you.

You may also send your forms through the mail. You may print the forms after filling them out and mailing them to workers. However, you cannot utilize Form A, which is in red, for the SSA if you obtain it from the internet. Rather, you should contact the IRS and get the official returns.

There are several forms that must be mailed to various recipients:

• Copies A and B should be sent to the Social Security Administration, Direct Operations Center, Wilkes-Barre, PA, 18769-0001.
• Copy 1: Send it to the state, city, or municipal tax department(s) where you pay your taxes.
• Copy D: Keep it for your records for at least four years.

These documents may be filled out for you by a payroll provider or an accountant. Many payroll programs charge extra for tax filing; others will fill out the forms but require you to mail them. The majority of the data comes from your payroll software.

Sending W-3 Forms Along With W-2 Forms

Form W-2 should be accompanied by IRS Form W-3, Transmittal of Wage and Tax Statements. Even if you only submit one, it should always be accompanied by Form W-2. It is used by the government to keep track of the salaries, wages, commissions, and other payments made by employers during the year, as well as the total FICA taxes withheld.

What Is the Difference Between a W-2 and a W-3?

The key difference between a W-2 and a W-3 is that the W-2 is for each individual employee, but the W-3 shows the total amounts you withheld for all workers. You just have to submit one W-3, regardless of how many W-2s you have.

Conclusion

Not only is the IRS Form W-2 crucial for the federal government and you, but it is also important for your workers. They need it in order to complete and submit their personal income tax returns on time. W-2s must be completed and filed by January 31 of each year if you are an employer. Payroll software can assist you in guaranteeing the accuracy of your data.

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