A W2 form is a salary and tax-related annual statement. As we take you through the complete details of everything related to the W2 form, some of your questions like ‘who should file a W2 form?’ get answered in this article.
What Is a W2 Form?
A W2 form refers to salary and tax-related annual statements. W2s contain the employee’s paycheck details and the tax withheld for a specific fiscal year.
Employers use the W2s to report FICA, Social Security, and Medicare taxes to the International Revenue System IRS). Full-time employees use W2 forms to file tax returns. The IRS requires W2 tax forms for individuals’ tax obligations.
Who Should File a W2 Tax Form?
An employer is legally bound to send a W2 tax form to every full-time employee. However, part-time employees and self-employed individuals don’t require a W2. They need to fill out a 1099 form for their tax return.
Employers need to issue W2 tax forms to every employee who earns more than USD 600 in a financial year. Besides, they can also use it for social security or health payment details. Furthermore, it is valid even if an employee’s wages are less than USD 600.
What Is a W2 Form Used for?
Employers use IRS W2 forms to report Federal Insurance Contribution Act (FICA) taxes for their employees throughout the year. Moreover, they use the W2s to prepare W3 forms. W2 is for individual employees, while W3 contains details of all the full-time employees in an organization. Most crucially, the usual deadline to file W2 information to the Social Security Administration (SSA) is January 31.
Employers withhold tax amounts to pay for SSA, Medicare, and applicable state taxes. Hence, they are required to provide this detail to employees to file their tax returns. Further, employers usually get this information by December 31.
SSA uses the W2 details to check an individual’s Social Security benefits and Medicare eligibility.
Below are a few common questions around the W2 Tax form.
Is the Deadline for W2 Form Submission Always Fixed?
No, the IRS may give an extension if the situation arises. For example, there was a severe storm situation in some states. Therefore, individuals in affected places got extensions until May 17 to file their 2020 W2 form.
Where Can I Find the W2 Form 2021 Template?
You can get the current year W2 form online and at the IRS official website. The website also houses all prior-year sample W2 forms and instructions.
How to Get a W2 From a Former Employer?
One of the common questions among individuals who have switched jobs – How to get the old W2 form? You may reach out to the HR or payroll department of your former employer. They must have all tax-related details available. Further, you may ask them to send a copy of the employee W2 form via email or mail. However, you can only do so if the former employer is no longer in business. In that case, you can fill out Form 4852, a W2 substitute for filing tax returns.
What Is the Unemployment W2 Form?
W2 is your wage and tax summary. However, some people also refer to it as the unemployment W2 form. Form 1099-G is mandatory for claiming unemployment benefits.
Do Employers Have to Mail W2 Forms?
Employees must file the wage and tax statement for their employees. They can do it electronically (e-filing) or mail it to the Social Security Administration (SSA).
Do I Get a W2 if I Only Make USD 500?
You need to earn a minimum of USD 600 to be eligible for a W2 statement. Moreover, you may get W2 based on the tax amount withheld from your paycheck, including non-cash benefits. Please note that W2 is only applicable for full-time employees, part-time employees, or self-employed individuals who receive form 1099.
Are you an employer who is unsure about tax-related obligations? If so, you may get assistance from experts who can guide you and simplify your job. But first, what does a W2 form look like? Read on to know how to read W2 forms and how to file W2 forms.
How to Fill Out a W2 Form?
Employers are responsible for filling out and sending the forms to SSA on behalf of their employees. It is a crucial exercise for the HR and payroll departments. Employers produce six copies. Of these, three go-to employees, two to the government, and employers keep one copy with themselves for recordkeeping.
The form contains boxes divided into three sections. Moreover, the first section contains employer and employee details. It includes the Employer Identification Number, employee Social Security Number, address details, and control number.
The other sections are for annual earnings and details of the amount withheld for paying taxes.
Step Wise Instruction to Filling out a W2
Employers need to follow specific steps to fill out the W2 tax form.
Step 1: In Box A, the employer should fill out the employee’s Social Security Number (SSN).
Step 2: In Box B and C, the employer should provide their Employer Identification Number (EIN), name, and address.
Step 3: In Box D, fill out the control number, a unique number assigned to each employee.
Step 4: In Box E, provide the employee’s name and address.
Step 5: Box 1 contains employees’ total earnings for the plan year.
Step 6: Boxes 3, 5, and 7 state how much earning applies for SSA and medicare contribution purposes.
Step 7: Boxes 2, 4, and 6 contain details of the sum of money set aside for Social Security, federal tax, and Medicare payments.
Step 8: Box 8 contains any tips to report, while Box 10 notes the money spent on dependent care services.
Step 9: Box 11 and 12 may not apply to every employer; you must check official IRS instructions.
Step 10: Fill out Boxes 15 to 20 with applicable federal state taxes, local wages, locality name, and address.
Ensure you provide the forms to respective stakeholders: your employees, state government, and Social Security Administration.
Always Double Check the W2 Tax Form
As employers, you must ensure 100% accuracy while filing the W2 form. The employee Social Security Number (SSN) is used to identify and track the information by the IRS. A minor mistake can create hassles for your employees when they do their tax returns or claim Medicare benefits.
Employees must also review the form carefully and return it to their employers for correction immediately. Moreover, the IRS uses the W2 documents submitted by employees to cross-check the corporate tax amount for employers. Hence, both employees and employers must review the information carefully.
Other Forms Related to W2
Businesses provide a 1099 form to report out non-employment-related income. Importantly, any employee who earns a minimum of USD 600 during the tax year must receive this form. The form contains the details of earnings and deductions.
- The 1098-E statement provides details of the interest amount paid for a federal student loan. Here, individuals may deduct the interest amount from the taxable income if they are eligible as per government rules.
- Form W2G is related to the amount won in gambling. Therefore, if you win while gambling, the casino withholds the tax amount to pay the federal government. The requirements and eligibility decide the deduction amount. Hence, the casinos need to send W2G to all the winners or prior plan years.
- Form 1040 is a US individual tax return. Employees need to disclose their earning and taxable income for the fiscal year. The form contains details of tax liabilities and applicable refunds. Individuals must attach the W2 tax form while filing their year-end returns through the 1040 form.
- If an employee doesn’t have a W2 form for the tax return. Form 4852 is the W2 replacement form.
W2 Form vs. W4?
A newly hired employee fills out a W4 form to provide crucial information. It includes the tax ID number or SSN, marital status, dependent details, and applicable allowances. Further, employees also state the amount of tax they wish to withhold from their paycheck. Employers use the W4 to calculate the taxable salary and set aside money to submit federal and state taxes.
Employers pay the withheld amount at regular intervals throughout the year. Simultaneously, employees learn their tax obligations at the end of the plan year after receiving the W2 from employers.
W2 is a critical tax and wage statement that shows how various taxes affect employees’ annual earnings. Employees also know if they owe any tax amount or expect a refund at the end of the year. Hence, employers must provide W2 details to employees much earlier than the IRS deadline.
Employees must review the form for accuracy and missing details. It helps to avoid hassles while filing year-end tax returns or getting social security and Medicare benefits. They must report any error to their employers as soon as possible and get it corrected.