Form W-2 (officially, the "Wage and Tax Statement") is an Internal
Revenue Service (IRS) tax form used in the United States to report
wages paid to employees and the taxes withheld from them. Employers
must complete a
Form W-2 for each employee to whom they pay a salary,
wage, or other compensation as part of the employment relationship. An
employer must mail out the
Form W-2 to employees on or before January
31. This deadline gives these taxpayers about 2 months to prepare
their returns before the
April 15 income tax due date. The form is
also used to report FICA taxes to the Social Security Administration.
The Form W-2, along with Form W-3, generally must be filed by the
employer with the
Social Security Administration
Social Security Administration by the end of
February. Relevant amounts on
Form W-2 are reported by the Social
Security Administration to the Internal Revenue Service. In
territories, the W-2 is issued with a two letter code indicating which
territory, such as W-2GU for Guam. If corrections are made, it can be
done on a W-2c.
1 Significance for employee's tax return
1.1 Tip income
2 Filing requirements
2.1 Filing modalities
5 Phishing Scheme Involving W-2s
6 Analogs in other countries
7 See also
8 External links
Significance for employee's tax return
Form W-2 includes wage and salary information as well as federal,
state, and other taxes that were withheld. This information is used by
the employee when they complete their individual tax return using Form
An employer must mail out the
Form W-2 to employees on or before
January 31. This deadline gives these taxpayers about 2 months to
prepare their returns before the
April 15 income tax due date.
When an employee prepares their individual tax return for a tax year,
the withholding amount from
Form W-2 is subtracted from the tax due.
It is possible to receive a refund from the IRS if more income was
withheld than necessary.
Since the IRS receives a copy of the W-2 from the employer, if the
amount reported on the W-2 does not match the amount reported on Form
1040, the IRS may get suspicious. In addition, if an individual does
not pay the required amount of taxes, the IRS will also know this.
In this way, the IRS uses
Form W-2 as a way to track an employee's tax
liability, and the form has come to be seen as a formal proof of
income. The Social Security Administration, court proceedings, and
applications for federal financial aid for college may all use Form
W-2 as proof of income.
The employee receives three copies of Form W-2: one for the record,
one for the federal tax return, and one for the state tax return.
Form W-2 must be attached to one's individual tax return; this is to
substantiate claims of withholding.
Employees are required to report their wage, salary, and tip income
even if they don't receive a
Form W-2 for it.
Employees are required to report their tip income to their employers
(usually using Form 4070). Tips are subject to income withholding.
There are various other requirements when handling tips for tax
Form W-2 must be completed by the employers and be in the mail to be
sent to employees by January 31. The deadline to the IRS is February
29. For electronic filings, the deadline to the IRS is April 2.
However, in accordance with the recently passed PATH Act, these
deadlines will be changing so the mailing and transmittal will now
January 31 starting with Tax Year 2016.
If over 250 instances of
Form W-2 are being filed for the year,
electronic filing is required.
The form consists of six copies:
Copy A - Submitted by the employer to the Social Security
Administration. (In addition, the employer must also submit Form W-3,
which is a summary of all Forms W-2 completed, along with all Copies A
submitted. The Form W-3 must be signed by the employer.)
Copy B - To be sent to the employee and filed by the employee with the
employee's federal income tax returns.
Copy C - To be sent to the employee, to be retained by the employee
for the employee's records.
Copy D - To be retained by the employer, for the employer's records.
Copy 1 - To be filed with the employee's state or local income tax
returns (if any).
Copy 2 - To be filed with the employee's state or local income tax
returns (if any).
Employers are instructed to send copies B, C, 1, and 2 to their
employees generally by
January 31 of the year immediately following
the year of income to which the
Form W-2 relates, which gives these
taxpayers about 2 1/2 months before the
April 15 income tax due date.
The Form W-2, with Form W-3, generally must be filed by the employer
Social Security Administration
Social Security Administration by the end of February.
Form W-2 has been completed by paper. Tax compliance
software such as
TurboTax allow the form to be completed
electronically. For paper filing,
Form W-2 can be ordered from the
When filing by paper, Copy A of the form cannot be printed from the
IRS website. In other words, the official form ordered from the IRS
must be used.
Late filings within 30 days of the due date incur a penalty of $30 per
form. After 30 days but before August 1, the penalty increases to $60
per form (capped between $200–$500 depending on size of business).
After August 1, the penalty increases to $100 per form (capped between
$500–$1500 depending on size of business).
The penalty for a single incorrect
Form W-2 is $250 per receiving
party (capped annually at $3 million); this means a single incorrect
Form W-2 to both the employer and the IRS incurs a penalty of $500.
The penalty of intentionally failing to file is $500.
Further penalties exist for illegible forms and for filing by paper
even past the 250 form limit.
Form W-2 was established by the Current Tax Payment Act of 1943
as part of an effort to withhold income at source. The first Form W-2s
were issued to employees in 1944.
In 1965, the form's name was changed from "Withholding Tax Statement"
to "Wage and Tax Statement" (current name).
In 1978, the form's appearance changed to its modern style of numbered
As with the US tax code and other forms (such as the 1040), Form W-2
has become more complicated over time.
The penalty for incorrect forms was increased in 2015.
Phishing Scheme Involving W-2s
In March 2016, the IRS issued an alert concerning a new type of
phishing email attack which attempts to lure human resources,
accounting, or payroll staff into disclosing the W-2 information of
all employees within a company, presumably intended for use in
tax-related identity theft, which the IRS defines as "...when someone
uses your stolen Social Security number to file a tax return claiming
a fraudulent refund." This may give a cybercriminal enough
information to fraudulently file a tax return on the victim's behalf
and direct the tax refund to the cybercriminal's bank account. This
phishing scheme is particularly characterized by its use of
spear-phishing (emails sent to specific individuals) and email
spoofing to pose as a company executive requesting the W-2
information, thereby increasing the urgency of the response and
catching payroll staff off-guard:
"Can you send me the updated list of employees with full details
(Name, Social Security Number, Date of Birth, Home Address, Salary)."
"Kindly send me the individual 2015 W-2 (PDF) and earnings summary of
all W-2 of our company staff for a quick review."
"I want you to send me the list of W-2 copy of employees wage and tax
statement for 2015, I need them in PDF file type, you can send it as
an attachment. Kindly prepare the lists and email them to me asap."
Large companies such as Snapchat, Mansueto Ventures, and
Seagate fell victim to this phishing scheme in early March 2016.
In late February 2016, KnowBe4 (a cybersecurity awareness training
company) was attacked by this type of phishing scheme, but
successfully identified it as a phishing attack and published a press
release identifying this new type of attack.
Those in the cybersecurity industry categorize this phishing scheme as
a type of CEO Fraud, while the FBI’s Criminal, Cyber, and
International Operations Divisions classify it as a type of "business
email compromise" or BEC.
Analogs in other countries
The British-Irish equivalent form to a W-2 is a P60. The Canadian
equivalent is called a T4. The Israeli equivalent is called a 106
form. The Russian equivalent is called 2-NDFL form. It can be compared
to Form 16[better source needed] as per Indian Tax
Instructions for Forms W-2 and W-3
^ See generally 26 U.S.C. § 6051, 26 C.F.R. sec. 31.6051-1
and sec. 31.6051-2.
^ a b c d e "What is a W-2 Form?". 2015. Retrieved January 25,
^ a b c d e f "Getting to Know the IRS W-2 Form". American Bar
Association. Retrieved January 25, 2016.
^ "Reporting Tip Income - Restaurant Tax Tips". Retrieved January 28,
^ a b c Myers, Cynthia. "What Are the Penalties to Employers for Late
W-2s?". Retrieved January 25, 2016.
^ Johnston, Carly, Sovos Compliance. "PATH Act: Crucial W-2, W-3,
1099-MISC Deadline Changes." Retrieved July 8, 2016.
^ "Topic 801 - Who Must
File Information Returns Electronically".
Internal Revenue Service. Retrieved January 24, 2016.
^ "W-2 Form". Retrieved January 25, 2016.
^ "Form W-2" (PDF). Internal Revenue Service. Retrieved January 28,
^ a b Sharon B. Bauman, Alan M. Brunswick, Esra Acikalin Hudson,
Sandra R. King, Stanley W. Levy and Mandana Massoumi (July 22, 2015).
"Penalties for incorrect W-2, 1099s just doubled". Retrieved January
25, 2016. CS1 maint: Uses authors parameter (link)
^ "IRS Alerts Payroll and HR Professionals to Phishing Scheme
Involving W-2s". www.irs.gov. Retrieved 2016-03-27.
^ "Data Breach: Tax-Related Information for Taxpayers". www.irs.gov.
^ "An Apology to Our Employees". snapchat-blog.com. Retrieved
^ "Fast Company sent employee data to hackers in the same kind of
email scam that targeted
Snapchat and Seagate". Business Insider.
^ "Seagate Phish Exposes All Employee W-2's — Krebs on Security".
krebsonsecurity.com. Retrieved 2016-03-27.
^ FL, TAMPA BAY,. "KnowBe4 CEO Sounds the Alarm on New Strain of CEO
Fraud". www.knowbe4.com. Retrieved 2016-03-27.
^ "Business E-Mail Compromise". FBI. Retrieved 2016-03-27.