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
* 1 Significance for employee\'s tax return
* 1.1 Tip income
* 2 Filing requirements
* 2.1 Who must file? * 2.2 Filing modalities
* 3 Penalties * 4 History * 5 Phishing Scheme Involving W-2s * 6 Analogs in other countries * 7 See also * 8 External links * 9 References
SIGNIFICANCE FOR EMPLOYEE\'S TAX RETURN
An employer must mail out the
When an employee prepares their individual tax return for a tax year,
the withholding amount from
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
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.
Employees are required to report their wage, salary, and tip income
even if they don't receive a
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 purposes.
If over 250 instances of
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
WHO MUST FILE?
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
Further penalties exist for illegible forms and for filing by paper even past the 250 form limit.
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 boxes.
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
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.