W-2 Deadline, Penalty & Extension for 2023/2024

The W-2 is a critical tax document that employers in the United States are required to send to their employees and the Internal Revenue Service (IRS) annually. The W-2 form provides information on the wages earned and the taxes withheld from the employee's paycheck. The deadline for employers to issue W-2 forms to their employees is January 31^st. Likewise, employers are also required to file copies of the W-2s with the IRS by the same date. If the employer fails to meet these deadlines, they may face penalties imposed by the IRS, starting from $60 per form if they're less than 30 days late, up to a maximum of $630,500 per year. However, if there's a legitimate reason that prevents timely submission, the employer can request an extension by completing a Form 8809. Keep in mind, this form must be filed on or before the due date of the returns.

How to get a W-2 extension?

If an employer requires additional time to prepare and submit the W-2 forms, they can request an extension by submitting IRS Form 8809, Application for Extension of Time To File Information Returns. This application needs to be filed before the original deadline, which is January 31. It's important to note that this extension is not automatic. The IRS grants a 30-day extension only for specific reasons such as a natural disaster, death, or unavoidable absence. Therefore, the employer should provide a detailed explanation on Form 8809 for the reasons necessitating the extension. If approved, the IRS will provide a one-time extension for filing the W-2 forms. However, it's recommended for employers to be prepared to issue and file W-2 forms by the original deadline to avoid potential penalties and maintain compliance.

When is the W-2 deadline?

The deadline for employers to provide their employees with W-2 forms for the 2023 tax year is January 31^st, 2024. This form, which details the employee's wages and the taxes withheld during the year, must be received by the employee on or before this date, whether it's delivered by mail, electronically, or in person. In addition to distributing W-2 forms to employees, employers are also required to file the W-2s with the Social Security Administration (SSA) by the same deadline of January 31, 2024. Meeting these deadlines is crucial for employers to avoid potential penalties and to ensure that employees can timely file their individual income tax returns.

What happens when the employer submits Form W-2 late?

Late filing of W-2s can cause problems for employees who may not have the necessary information to file their personal income tax returns timely and accurately. It's important for employers to remember that if they realize they've missed the deadline, they should still file the W-2 forms as soon as possible. The IRS penalties increase the longer the delay, so immediate action can help to limit potential penalties. If there's a legitimate reason for the delay, employers can also submit Form 8809 to request an extension, although this form must be submitted on or before the W-2 due date.

What is the penalty for late filing of Form W-2 2023?

The penalties for late filing of Form W-2 are based on how late the forms are submitted, according to the IRS. For W-2s meant for the 2023 tax year:

If the forms are filed within 30 days from the due date, the penalty is $60 per form.
If the forms are filed more than 30 days late but before August 1^st, the penalty is $120 per form.
If the forms are filed after August 1^st or not filed at all, the penalty is $310 per form.

The maximum penalty for small businesses (those with gross receipts of $5 million or less) ranges from $220,550 to $1,261,000 depending on how late the forms are filed. For larger businesses, the maximum penalty ranges from $630,500 to 3,783,000. These penalties underscore the importance of filing W-2 forms accurately and on time. It's also important to note that intentional disregard of the filing requirements increases the per-statement or per-operation to at least $550 with no maximum.

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How do employers file form W-2 before the deadline?

Employers have two main methods to file W-2 forms before the deadline: electronically or by mail.

The IRS encourages employers to file forms electronically, particularly if they have a large number of employees. Any employer that has to file 10 or more W-2 forms is actually required to file electronically. To file W2 forms electronically, employers can use the Social Security Administration's (SSA's) Business Services Online (BSO) system. The BSO allows employers to create, save, print, and submit W-2s online. It also provides receipt of filing.

If the employer needs to file fewer than 10 W-2 forms and chooses to file by mail, they should use the IRS's pre-addressed forms and envelopes. When filing by mail, the employer must also include Form W-3, which is a transmittal form summarizing the information from the W-2s.

Regardless of the method of filing, it's crucial for employers to ensure accuracy of the information on the forms and submit them by the January 31 . Also, they must provide copies of the W-2 forms to their employees by the same date.

Finally, remember to keep copies of all filed W-2s and the W-3 for at least four years. This is recommended in case of potential future inquiries or audits by the IRS or SSA.

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How can employers avoid late penalties for Form W-2?

There are several strategies that employers can adopt to avoid late filing penalties for Form W-2:

Organization: Maintain accurate and up-to-date records throughout the year. Regularly verify and update employee information such as social security numbers, addresses, and withholding status. This makes the preparation of W-2 forms simpler and less prone to errors.
Timely Preparation: Begin preparing W-2 forms well before the deadline. Waiting until the last minute can result in rushed work and potential errors or late submission.
Electronic Filing: Consider filing the forms electronically. Electronic filing is faster, provides immediate confirmation of receipt, and is required for employers filing 10 or more W-2s.
Use Reliable Software: Tax preparation software can help streamline the process, perform automatic calculations, and alert you to potential errors.
Understand the Requirements: Familiarize yourself with the filing requirements and deadlines to avoid common mistakes. If you're unsure about something, consult with a tax professional.
Apply for Extension if Necessary: If circumstances beyond your control prevent you from filing on time, remember to apply for an extension using Form 8809 before the January 31 deadline.
Respond to IRS Notices: If you receive a notice from the IRS related to your W-2 forms, respond promptly to resolve any issues.

Adopting these strategies can significantly reduce the risk of late filing penalties. However, if mistakes happen, promptly correct them with the IRS to potentially reduce any penalties.

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