Form W-2 is the annual wage and tax statement that every employer must furnish to employees and file with the Social Security Administration. Getting W-2s right is critical — errors can trigger IRS penalties and cause headaches for employees filing their personal tax returns.
In This Guide
Who Gets a W-2?
Every employee who received wages, tips, or other compensation during the year must receive a W-2 — even if no taxes were withheld. This includes full-time, part-time, and seasonal employees. Independent contractors receive Form 1099-NEC instead.
You must furnish W-2s to employees by January 31 of the following year and file copies with the SSA by the same date.
Key W-2 Boxes Explained
Box 1 (Wages, tips, other compensation): Total taxable federal income — gross pay minus pre-tax deductions like 401(k) and health insurance. Box 2 (Federal income tax withheld): Total federal tax withheld from paychecks during the year.
Boxes 3-6 cover Social Security and Medicare: Box 3 is Social Security wages (capped at the wage base), Box 4 is Social Security tax withheld, Box 5 is Medicare wages (no cap), and Box 6 is Medicare tax withheld.
Boxes 15-20 report state and local tax information. Each state where the employee worked gets its own line with the state employer ID, state wages, and state tax withheld.
Box 12 uses letter codes to report special items: Code D (401k), Code DD (health insurance cost), Code W (HSA contributions), and others. Box 13 checkboxes indicate statutory employee, retirement plan participant, or third-party sick pay.
Common W-2 Errors
Incorrect Social Security numbers — the #1 reason for SSA rejection. Wrong employee names (must match SSA records exactly). Incorrect EIN or business name. Misreporting pre-tax deduction amounts in Box 12.
Failing to include state/local information for multi-state employees. Not filing W-3 (the transmittal form) alongside W-2s. Using the wrong tax year form.
Electronic vs. Paper Filing
If you file 10 or more W-2s, you must file electronically with the SSA. Paper filing is only allowed for fewer than 10 forms. Electronic filing uses the SSA's Business Services Online (BSO) portal or an authorized e-file provider.
Employees may receive W-2s electronically if they consent. Electronic delivery is faster, more secure, and eliminates postage costs.
W-2 Corrections (W-2c)
If you discover an error after filing, you must file Form W-2c (Corrected Wage and Tax Statement) with the SSA and furnish a copy to the affected employee. Common corrections include wrong SSN, incorrect wage amounts, and missing state information.
There's no deadline for W-2c filing, but corrections should be made as soon as the error is discovered to avoid compounding issues.
How Payrollix Generates W-2s
Payrollix generates W-2s automatically from the year's payroll data. Every payroll run accumulates the data needed for each W-2 box — wages, withholding, pre-tax deductions, state allocations — so year-end is just a one-click operation.
The system generates print-ready PDFs, delivers them to employees via their self-service portal, and archives copies to S3 for IRS-compliant 4-year retention. W-3 transmittal forms are generated automatically alongside the W-2s.
For accountants managing multiple clients, batch W-2 generation processes all clients' employees at once with per-client progress tracking.
Generate W-2s in one click
Payrollix compiles a year of payroll data into accurate W-2s with automatic PDF generation, employee delivery, and S3 archival.
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