As you are aware, the IRS changed the W-2 and 1099 filing deadline to January 31, 2017 – which was yesterday! In case you were wondering why they just had to add more stress to your entrepreneurial oversized plate of worry, here’s a link with the details.
Once you take your sigh of relief when the last W-2 and/or 1099 has been postmarked or sent electronically, wait. Is your W-2 season over?
Maybe – or maybe not.
For many employers, at least three additional things can happen:
- The W-2s you patiently stood in line at the post office to get postmarked before the deadline are returned to you by the Postal Service marked undeliverable.
- A current or former employee complains that there is a mistake on his or her W-2.
- An employee to whom you mailed a W-2 says he or she never got it.
In each instance, you may have to take action.
What to do when you have undeliverable Forms W-2:
If you mailed a W-2 to the last known address of a current employee, but it gets returned as undeliverable, hand it to the employee.
However, if it’s a former employee, the IRS states that you are required to:
“Keep for 4 years any employee copies of Forms W-2 that you tried to but could not deliver. However, if the undelivered Form W-2 can be produced electronically through April 15th of the fourth year after the year at issue, you do not need to keep undeliverable employee copies.”
What to do when there are errors on a W-2:
As soon as you have sent your W-2s to the Social Security Administration, you will need to complete form W-2c and forms W-3c (to the SSA) to correct any errors.
If the W-2 has an error, the required action depends on what is incorrect. For example, the SSA and the IRS don’t really care if the address is incorrect; the employee can use the W-2 as is.
Common W-2 errors that must be corrected:
Using a form from the wrong year. Don’t use leftovers from a previous year. “Use the W-2 form for the year the income was taxable, not the year you are filing the form,” says Jean Murray, a business coach at The Balance. “For example, for employee wages in 2015, use the 2016 W-2 form; this form will be given to employees and filed with the Social Security Administration in 2017.”
Error in employee Name and SSN. Use Form W-2c to correct, and provide copy to the employee. Complete a W-3c and send to SSA.
Error in an amount. Use Form W-2c to correct, and provide copy to the employee. Complete a W-3c and send to SSA.
Missing Name or SSN. In this case, you must contact the SSA directly at 1-800-772-6270.
Sending W-2s to the wrong place. Don’t send them to the IRS. They should go to the SSA.
Formatting errors. The IRS identifies several common formatting errors that employers make on Form W-2.
- Decimals and cents. You must use decimals and cents when entering dollar amounts on the form. Dollar amount entries should look like this: 0000.00
- Ink color. You should only use black ink on Form W-2. Other ink colors are too light for the scanners to process.
- Font size. The font must be big enough to read, but small enough to stay within the box boundaries. If you can, use 12-point Courier font.
- Dollar signs. Money amounts should not have a dollar sign.
Forms W-2c and W-3c
You can order your forms online.
Follow the instructions to ensure accuracy.
What is the Employee says S/He Never Received It?
If an employee says he or she never got the W-2, you just need to provide a copy, if you can’t prove that it was delivered. Even if it was delivered, and the employee says it was never received, the simplest thing to do is reprint it and give it to him or her.
Remember: Once you have issued W-2s, you need to be able to reprint them for at least four years, as if they were returned, even if you never got them back. If a W-2 is lost, trusting in the U.S. Postal Service is not an option.
W-2 season is never really over but being prepared up front will save a lot of re-work, frustration and stress.
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