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Takeaway
The Form W-2 is a tax document sent by businesses to their employees to outline tax and compensation info. But just because you understand what the W-2 does doesn’t mean complying with it is easy. Review some useful thoughts to consider for compliance with the current IRS deadlines, what each section of the W-2 means, generally, and some tips to protect your company from noncompliance.
The Form W-2 might be one of the most common tax documents, but understanding and regularly revisiting the rules can be crucial to compliance.
Even without substantial updates, employers should be ready to answer questions about W-2s around:
- definitions
- tables
- deadlines and distribution
- unusual tax situations
Whether you’re a seasoned HR pro or new to the field, we’ll help you navigate the W-2 — and your employees’ concerns about it — with confidence.
What is the Form W-2?
The Form W-2 is an IRS tax form sent by employers to their employees at the end of each year. The document outlines compensation data for each worker, including:
- wages
- benefits
- taxes withheld
- other relevant info from the year
The IRS uses W-2s to calculate tax obligations, while employees rely on them to file their taxes. You may hear workers themselves referred to as “W-2s.” Don’t get confused — this just means that their organizations have been withholding and paying taxes from those employees’ paychecks.
What are employers required to do with Form W-2s?
The IRS requires businesses to distribute W-2s to any employee who received taxable monetary or nonmonetary compensation (i.e., a paycheck and health insurance). W-2s must also be sent by mail, unless the recipient consents to receive the tax form electronically. Consider using payroll tax management software to simplify and streamline this requirement.
For employees who have no income tax withheld, organizations must still notify them about their ability to claim an income tax refund based on the Earned Income Tax Credit (EITC). The EITC notice appears on the back of Copy B of the W-2, but an employee can elect to receive a substitute statement with the same wording. A worker might request a substitute statement because the employee:
- has an alternate Form W-2 that doesn’t have the EITC notice
- wasn’t entitled to receive a W-2
- didn’t receive the W-2 from their employer on time
Read the General Instructions for Forms W-2 and W-3 for more context.
What’s new for Form W-2 in 2026?
In early 2026, the IRS released an updated Form W-2 reflecting changes made by the One Big Beautiful Bill Act (OBBBA). This includes new boxes and codes as well as rule adjustments for filing and penalty tiers.
IRS filing updates and electronic submission thresholds
For filing 2025 wages with the 2026 W-2, the major change is a new $2,000 reporting threshold for payments without tax withholding, replacing the old $600 rule, with further inflation adjustments to come.
The threshold to file electronically is reduced to 10 or more W-2s in a year, making e-filing mandatory for most businesses.
2026 SSA reporting format and filing changes
Employers must file Form W-2s with the Social Security Administration (SSA) and furnish statements to overtime recipients showing qualified overtime compensation paid during the year. The due date for filing is Feb. 2, whether you file using paper forms or electronically. However, the IRS confirmed through Notice 2025-62 that employers won’t face penalties for failing to provide statements for their employees’ tips and overtime. Even so, this relief only applies to tax year 2025.
Time extensions to file are not automatic. You may request a 30-day extension by submitting a completed Form 8809, Application for Extension of Time to File Information, indicating that at least one of the criteria on the form and instructions for granting an extension applies and signing under penalties of perjury.
The SSA will reject Form W-2 electronic and paper wage reports if:
- Medicare wages and tips are less than the sum of Social Security wages and tips.
- Social Security tax is greater than zero, and social security wages and tips are equal to zero.
- Medicare tax is greater than zero, and Medicare wages and tips are equal to zero.
Updated penalty tiers and compliance rules
Updated W-2 penalty tiers for late or incorrect filing increase from $60 to $330 or more per form. Penalties increase based on how late the forms are filed.
- Filed within 30 days of deadline: $60 per form ($683,000 max for large businesses, $239,000 max for small businesses)
- Filed after 30 days but before August 1: $130 per form ($2,049,000 max for large businesses, $683,000 max for small businesses)
- Filed after August 1 or not at all: $340 per form ($4,098,500 max for large businesses, $1,366,000 max for small businesses)
- Intentional Disregard: Minimum $680 per form, no max
New Box 12 codes
Box 12 has three new codes:
- TA: employer contributions to a Trump account
- TP: total amount of cash tips reported to the employer
- TT: total amount of qualified overtime compensation
Revised Box 14
Box 14 is now split into two boxes:
14a – Other: Employers may use Box 14a to report information such as state disability insurance taxes withheld, union dues, uniform payments, health insurance premiums deducted, nontaxable income or educational assistance payments.
14b – Treasury Tipped Occupation Codes: Employers will use Box 14b to report up to two Treasury Tipped Occupation Codes for an employee’s tipped occupation. These codes will be used to determine whether the employee is in an occupation eligible for the deduction for qualified tips (reported in Box 12 with code TP).
New Schedule 1-A
The new IRS Schedule 1-A (Form 1040) consolidates four new deductions from the OBBBA into one form:
- No Tax on Tips: for eligible tipped occupations
- No Tax on Overtime: for certain types of overtime pay
- Car Loan Interest Deduction: for interest paid on car loans
- Enhanced Senior Deduction: for taxpayers 65 and older
Form W-2 deadlines for 2026
The following deadlines apply to the filing and furnishing of Form W-2 for tax year 2025. Meeting these deadlines is crucial to avoiding penalties and ensuring compliance with the IRS.
Deadline for employers to send Form W-2
Businesses must deliver W-2 copies B, C and 2 to their employees by Feb. 2. If a company mails these copies on or before Feb. 2 however, the IRS still considers it compliant, provided the worker’s mailing address is accurate and the W-2s are delivered within two weeks of their send date. The same remains true for employees terminated before Dec. 31 of the current tax year; while employers may send these W-2s early, they must do so before Jan. 31 of the following year.
Additionally, employers must mail or electronically file Copy A — and a complete Form W-3 — by Feb. 2, too.
Deadline with Social Security Administration (SSA)
Employers must file Form W-2 with the Social Security Administration (SSA) by Feb. 2. This deadline applies to both paper and electronic filings.
Penalties for late or incorrect filings
The IRS imposes penalties for each late or incorrect W-2. Penalties range from $60 to $660, depending on the length of the delay and business size.
What is a Form W-3?
In addition to filing W-2s with the IRS, businesses must also file a Form W-3 with the Social Security Administration (SSA). This gives the SSA access to Copy A of the W-2, which provides information about an employee’s combined income and tax withholdings.
What factors affect Form W-2 distribution?
Two primary variables influence how and when an employer can send a W-2. In most cases, Jan. 31 of the following year will still be an employer’s deadline to distribute the form (unless it falls on a weekend or holiday). However, knowing when you can send it early — or potentially late — will help your administrators be proactive with compliance.
Changes in employment status
Companies have the option to send W-2s early for employees terminated in the last tax year. Regardless of whether the form is sent early or by the deadline, the affected individual must notify their previous employer of an address change (if any). This allows both the former worker and their prior employer to remain compliant, given both have a responsibility to file their taxes.
Special circumstances
Certain situations give businesses a chance to file an extension of 30 days. In the event of a catastrophe — like a fire or a natural disaster — employers may submit a Form 8809. If granted, this gives employers more time, but it can also interrupt an employee’s filing and the receipt of a potential return. That’s why the 8809 is generally used for extreme circumstances.
How do employers file the Form W-2?
Businesses with less than 10 employees may file W-2s electronically or by mail. All others must file electronically. While using the right payroll tax management software is the simplest approach, let’s explore both methods to better understand the entire filing process.
Filing by mail
Even if an employer completes the W-2 by hand, the IRS ultimately reviews it digitally. This means it’s crucial for businesses to ensure the mailed form is clear and legible to avoid errors or delays. To alleviate this slightly, the IRS allows companies to download the Form W-2 and fill it in electronically. Though time-consuming, this makes it easier for employers to correct mistakes (and keep the IRS from interpreting questionable handwriting).
If an employer goes this route, they must complete all mandatory boxes on the W-2 for each employee. They have the option to skip irrelevant fields, but at the very least, HR should understand what makes up the required spaces:
| Form W-2 Mandatory Boxes | ||
|---|---|---|
| Boxes | Description | |
| Box A | Employee’s Social Security number | |
| Box B | Employer Identification Number (EIN) | |
| Box C | Employer’s name, address and ZIP code | |
| Box D | Control number | |
| Box E | Employee’s name | |
| Box F | Employee’s address | |
| Box 1 | Wages, tips and other compensation (excluding elective deferrals like 401(k) or 403(b) plans) | |
| Box 2 | Total federal income tax withheld | |
| Box 3 | Social Security wages (earnings the Social Security tax is derived from) | |
| Box 4 | Social Security tax withheld | |
| Box 5 | Medicare wages and tips (this should be the same as Box 3) | |
| Box 6 | Medicare tax withheld | |
| Box 7 | Social Security tips (tips that the employee has reported) | |
| Box 8 | Allocated tips (if applicable) | |
| Box 10 | Dependent care benefits (the amount spent on dependents under an employee assistance program) | |
| Box 11 | Nonqualified plans | |
| Box 12 | Codes* | |
| Box 13 | Checkboxes (Check all that apply for statutory employees, retirement plans and third-party sick pay.) | |
| Box 14a | Other (This is for any additional info an employer wants to convey, like company vehicle lease value, uniform payments and nontaxable income.) | |
| Box 14b | New for reporting Treasury Tipped Occupation Codes | |
| Boxes 15-20 | State and local income tax | |
*Review page 30 of the IRS General Instructions for Forms W-2 and W-3 for a complete list of Box 12 codes.
Filing electronically
The IRS strongly recommends all employers file W-2s electronically to reduce errors and time sinks. A single software like Paycom simplifies this process. The tech gives employers an opportunity to easily review W-2s before the forms are automatically distributed.
And because payroll exists in the same software as Paycom’s tax management tools, it seamlessly populates the applicable boxes. This allows employers to avoid the pitfall of data reentry and connects companies to a dedicated tax support team for more complex W-2 needs.
How employers use Form W-2
Employers use Form W-2 to report their workers’ income and taxes to the IRS. They also provide a copy to their employees for tax filing purposes.
Reporting income or tax returns
Employers use Form W-2 to report an employee’s income, Social Security taxes and Medicare taxes for the tax year. The form should include the employee’s name, address and Social Security number, as well as the employer’s name, address, ZIP code and Employer Identification Number (EIN).
W-2s also report any federal income tax, Social Security tax and Medicare tax that was withheld from an employee’s pay. Accurate reporting of income and taxes is essential to ensure that employees receive the correct tax credit and to avoid penalties for noncompliance.
Comparing W-2 information with pay stubs
Employers should compare the information on a Form W-2 with an employee’s pay stubs to ensure accuracy and consistency. The W-2 should match the employee’s pay stubs in terms of income and taxes withheld.
Employers should also verify that the employee’s name, address and Social Security number are correct on both the W-2 and the pay stub. This comparison helps to identify any errors or discrepancies that may need to be corrected before submitting the form to the IRS.
State-specific Form W-2 rules in 2026
Many states require W-2s to be filed with the state and may require their own annual reconciliation form, similar to the Federal W-3.
Electronic filing requirements by state
States have different rules, though many now require electronic filing, often matching the federal threshold of 10 or more returns. Visit your state’s tax agency website for their specific W-2 e-filing thresholds and deadlines.
State-level deadline variations
Most states follow the Federal W-2 deadline of Feb. 2 for 2026. However, several states have variations. Check your state’s Department of Revenue for exact dates.
What is the difference between Form W-2 and Form 1099?
Form W-2 and Form 1099 are both used to report income to the IRS, but they serve different purposes and are used for different types of workers. Form W-2 is used to report an employee’s income and amount of tax their employer withheld. It is typically provided to employees by their employers.
Form 1099 is used to report non-employee income — such as freelance work, interest and dividends — and is typically issued to independent contractors and self-employed individuals.
What is the difference between Form W-4 and Form W-2?
Form W-4 is completed by employees while Form W-2 is completed by employers. Form W-4 is used by employees to determine their tax withholding and is typically completed when an employee starts a new job or experiences a change in income. Form W-4 also includes a useful deduction worksheet that outlines what is and isn’t withheld by employers.
Form W-2, on the other hand, is used by employers to report employee income and taxes to the IRS and provided to employees for tax filing purposes.
Can employers file taxes without a W-2?
In most cases, employers must give their employees W-2s. However, this only applies to part- and full-time employees on payroll. If a business only has independent contractors, for example, they’ll use the Form 1099 instead of a W-2.
How can employers correct a W-2 after submission?
If an organization realizes a mistake after the IRS receives the erroneous W-2, they can still fix issues by filing Forms W-2 C and W-3 C. Since these documents alert the IRS and SSA about the problem, the forms should be sent as soon as possible to help ensure the quickest response.
Additionally, W-2 Cs and W-3 Cs shouldn’t be a regular part of a company’s tax process. If you consistently file them, they may speak to a larger issue in the organization’s tax strategy. Find the source of the errors and determine if it’s truly isolated with the relevant parties, like HR, tax specialists and affected employees.
What happens if an employer doesn’t file a W-2?
Failing to file taxes — like those calculated from a W-2 — keeps revenue and returns away from the government and individuals. The Department of Justice enforces the collection of all employment taxes. The agency administers penalties relative to the harm caused. In other words, punishments are generally higher based on the number of employees the violation affected.
What happens if an employer misses a W-2 deadline?
If an employer fails to distribute W-2s on time, employees can report it to the IRS. This can prompt the agency to take action, which could just involve a reminder or, in severe cases, penalties that result in:
- fines
- restitution
- criminal convictions
If an employee receives their W-2 by mid-February, they’ll have approximately two months to file their taxes by April 15. If a company delays their access, it prohibits the time people have to adequately prepare and file their taxes. Prolonging this process could deprive an employee of a potential refund and amplify financial stress.
Accordingly, IRS fines related to W-2 delays escalate based on the time lost. In 2025, employers that miss a deadline may receive fines for each W-2 of:
- $60 for being up to 30 days late
- $130 for being 31 days late through Aug. 1
- $330 after Aug. 1 or not filing outright
- $660 for intentionally disregarding a filing date.
Again, companies should rely on comprehensive tax management software to reduce the chances of late or missed deadlines.
Tips for employers for the 2026 Form W-2 updates
Update payroll and HR systems
Key payroll and HR system updates for 2026 include:
- Tip and overtime tracking: Configure systems to distinguish between regular pay and “qualified” tips/overtime.
- Withholding tables: Update payroll systems to incorporate 2026 federal income tax withholding tables and any applicable state-level changes.
- Social Security wage base: Update the maximum taxable wage for Social Security, which increases to $184,500 for 2026.
- Retirement contributions: Increase 401(k) employee elective deferral limits to $24,500.
- HSA and FSA limits: Update maximum contributions for Health Savings Accounts (HSA) to $4,400 (self-only) and Health Flexible Spending Arrangements (FSA) to $3,400.
- Roth catch-up contributions: Under SECURE 2.0, participants earning over $145,000 (indexed) must make catch-up contributions on a Roth basis starting in 2026.
- 1099-NEC/MISC Threshold: The reporting threshold for these forms increases from $600 to $2,000 for 2026.
Gather and adapt to occupation codes
Significant changes are being introduced to Form W-2 in 2026 to capture specific occupation codes for tipped employees to support the “No Tax on Tips” deduction.
- New Box 14b (Treasury Tipped Occupation Code): Employers must report a Treasury Tipped Occupation Code (TTOC) for employees in tipped roles.
- Renumbering: The current Box 14 will become Box 14a, while the new 14b field is added.
- Box 12 changes: New codes are introduced for Box 12 to report qualified tips (code TP), qualified overtime (code TT) and employer contributions to a Trump account (code TA).
- Two codes allowed: The IRS allows up to two Treasury Tipped Occupation Codes to be reported in the new Box 14b.
- “000” code: A code of “000” is to be used in Box 14b when the tips received are not qualified tips eligible for the deduction.
Coordinate with payroll providers
Ensure your payroll software is updated to handle new Box 12 codes (TA, TP, TT) and the 14b occupation code for the first payroll of 2026.
Educate employees and staff
With numerous changes to W-2 fields, it’s important to educate your payroll team on tracking these changes, training staff on new tipped/overtime rules, updating systems for the new codes and increased Social Security wage bases, and communicating the Feb. 2 deadline to staff for online access.
Do not file based on draft forms
Right now, the 2026 IRS W-2 General Instructions form is still in the drafting stages. It’s important to wait for that document to be finalized to avoid incorrect or rejected filings.
How does the right HR software simplify W-2 management?
Paycom’s payroll tax management tools make W-2 compliance easier by automatically:
- debiting payroll taxes
- depositing taxes on their due dates
- remitting relevant filings like W-2s and W-3s
The tech ensures each employee receives only one W-2 — even in more complex tax situations. That’s because with Paycom, payroll flows seamlessly across our single software, eliminating the chance of mistakes and unnecessary tasks.
Plus, difficult calculations and stressful deadlines take a backseat to peace of mind, as we automatically convert and balance year-to-date totals. Plus, Paycom distributes W-2s electronically by the required IRS deadline.
Download Paycom’s 2026 HR and Payroll Calendar packed with compliance deadlines and resources to enhance your HR strategy.
FAQ
When are employers required to distribute Form W-2?
Employers must distribute Form W-2 to their employees no later than Feb. 2.
Who fills out Form W-2?
Employers are responsible for filling out Form W-2 and providing it to their employees.
Can employers file for an extension for Form W-2 distribution?
Employers may request a 30-day extension by submitting Form 8809 to the IRS.
What if an employee never receives their W-2?
If an employee never receives a W-2, they may contact their employer by early February. If that fails, contact the IRS to get help, potentially use Form 4852 to estimate wages and file, or request a Wage and Income Transcript from the IRS for accurate filing, even if asking for a tax extension is needed.
Can W-2s be issued electronically in 2026?
Yes, W-2s can be issued electronically, and this is often required for employers filing 10 or more forms. Note that employee consent is mandatory for them to receive the electronic version instead of paper. Employers must obtain explicit consent and inform employees about their right to a paper copy.
Are digital signatures valid on W-2 forms?
Yes, the IRS officially accepts various forms of electronic and digital signatures on tax documents, including W-2s, provided they meet the specific criteria for intent, authentication and integrity under the E-Sign Act and UETA.
What to do if you submitted incorrect W-2 data?
If you submitted incorrect W-2 data, first contact your employer for a corrected Form W-2c, then file an amended return using Form 1040-X if the correction changes your tax liability. If you can’t get the W-2c in time to file, use Form 4852.
How to handle W-2cs (corrected W-2s)?
For Form W-2c, you’ll enter the corrected data as you would for a regular W-2 in your tax software and mark it as “corrected.” Use the most recent W-2c to combine all changes, keeping the original W-2 for complete records and reporting both forms to show the full picture of your wages and taxes for the year.
How can employers verify employee information before filing Form W-2?
Key verification methods
- Review payroll data: Payroll systems’ W-2 previews or year-end reports can be used to check names, addresses, Social Security numbers (SSNs) and wages for accuracy.
- Verify with SSA: The Social Security Administration’s Business Services Online (BSO) can be used to confirm that employee names and SSNs match SSA records. Access requires logging in with login.gov or ID.me.
- Check Form I-9: Ensure W-2 information matches the employee’s Form I-9, Employment Eligibility Verification. This is especially important for identity and work authorization.
- Use E-Verify for new hires: If subject to E-Verify, confirm the employee’s information through the system to validate their eligibility and details.
- Direct employee confirmation: Employees can review their information for accuracy and update records, such as address changes, before W-2s are generated.
Can an employer reissue a lost or damaged W-2?
Yes, this can be done by reprinting it and marking it “REISSUED STATEMENT.” It can be provided electronically or on paper to help you file your taxes on time. Note that you may be charged a small fee for the replacement. If your employer can’t help, you can get wage information from the IRS Wage and Income Transcript or use Form 4852 to estimate your income and withholdings to file.
How long should employers keep copies of Form W-2 and related records?
Employers are required to keep copies of Form W-2 and related employment tax records for at least four years after the tax becomes due or is paid, whichever is later, to ensure compliance with IRS rules. Note that state and local rules and specific benefit and termination records may require longer retention (up to six years, depending on the document).
How do W-2 filing deadlines differ for paper and electronic submissions?
There is no difference in the filing deadline between paper and electronic submissions. Both require employers to file with the SSA and furnish copies to employees by Feb. 2.
