Form W2, Wage and Tax Statement is the same as it was last year. The Internal Revenue Service didn’t bring any changes to the form. For your employees to report their earnings on their federal income tax returns, you’ll file Form W-2 the same way you did for the previous tax season. It doesn’t take much to file Form W2 and cause you’ll file identical copies for every form, it shouldn’t take too much of your time to complete this tax obligation for every employee.
In this article, we’ll go over the things that should be known about Form W2, provide you with instructions for every box and answer commonly asked questions about filling out this information return.
W2 Form 2024 - 2025 Instructions
Wages, tips, and other compensation
Enter the total gross amount received by the employee in wages, salaries, tips, and other compensation.
Federal income tax withheld
Enter the tax withheld from the above income for federal income tax purposes.
Social Security wages
Enter the total amount of employee’s income, except tips, subject to the Social Security taxes.
Social Security tax withheld
Enter the total Social Security tax withheld from the employee’s income during the tax year. This should be 6.2 percent of the Social Security wages and tips.
Medicare wages and tips
Enter the total amount of Medicare wages and tips. Do not separate tips as you did for the Social Security tips.
Medicare tax withheld
Enter the total amount of Medicare wages withheld. This should be 1.45 percent of the Medicare wages and tips.
Social Security tips
Enter the tips received, subject to Social Security taxes.
Blank
Enter other income payment(s)to the employee that can’t be reported using other boxes.
Dependent care benefits
Enter the dependent care benefits employee received during the tax year, if any.
Nonqualified plans
Enter the nonqualified plans, if any.
Box 12
Box 12 reports different kinds of income payments that can’t be reported using other boxes. However, Box 12 has different codes that must be entered for the payment.
Information about employee
If the employee received or one of the following, check the box that corresponds to it.
- Statutory Employee
- Retirement Plan
- Third-Party Sick Pay
Other
Enter anything that can’t be reported using any of the above boxes and state the purpose of the payment.
Employer’s state ID number
Enter your state identification number.
State wages, tips, etc.
Enter the total amount of income earned by the employee that’s subject to state income taxes. If your state doesn’t tax wages, leave it blank.
State income tax
Enter the state income tax withheld from the employee’s income.
Local wages, tips, etc.
Enter the total amount subject to local income taxes earned by the employee.
Local income tax
Enter the local income tax withheld.
Locality name
Enter the name of the local government.
Important things to know about Form W2
Before you fill out the form by looking at the instructions though, there are a couple of things you should keep in mind that can save you a lot of trouble. First and foremost, Form W2 must be completed by January 31 to everywhere you need to file. You’ll need to file a copy to keep for your records, a copy for Social Security Administration and state tax department, and for the employee. You can see where to file each form on the bottom of it.
Penalties for possible late filing Form W2
For an employer who files Form W2 at a later date than should, the Internal Revenue Service adds penalties to the business. The penalties are paid differently than taxes and must be paid at once. Every Form W2 that you file late within 30 days after the January 31st deadline, you’ll pay a $50 penalty. This penalty is increased to $110 per violation after the 30 days passes. So, if you file Form W2 at a later date than March 2, you’ll pay $110 per tax form. Since these forms are information returns that must be filed regardless, the penalty further increases to $270 per violation and the penalty for wilfully neglecting to file Form W2 sets you back $500.
Assuming you wouldn’t want to pay these penalties as they can add up to a significant amount, make sure you file Form W2 timely. As soon as the last paycheck of the tax year is processed, you can file Form W2 for the employees. You will have more than 30 days to file Form W2 from the date you can file it to the deadline, which should be plenty to fulfill this tax obligation.