For tax year 2017, both electronic and paper Form W-2 wage reports must be filed with the Social Security Administration (SSA) by Jan. 31, 2018. Based on Department of Treasury recommendations, the Internal Revenue Service (IRS) enacted the law in 2016 mandating the change in an effort to detect and prevent fraud and identity theft. The goal is to narrow or close the gap between the time tax returns are filed and the time at which third-party information is available for use by the IRS.
Previously, employers had three months from year’s end to submit their W-2 forms. That timeframe has now been condensed to one month. How do you consolidate your process?
Employers should start preparing now, before the holidays and end-of-year crunch:
- Verify the accuracy of employee information
- Review year-end reporting for discrepancies
- Make adjustments, if necessary
The following states, along with the District of Columbia and Puerto Rico, have followed suit and adjusted their deadlines to Jan. 31, 2018:
District of Columbia
* in New York, fourth-quarter wage reporting and annual employee wage and withholding information must be filed by Jan. 31.
The list above is up to date as of the time this article was written. This information is subject to change based on state policy and legislation. Please confirm the requirements for your specific state(s) with the appropriate tax or revenue department to be sure you are aware of any more recent changes.
Federal penalties employers for not filing W-2s by Jan. 31 are based according to the size of the organization: large businesses with gross receipts of more than $5 million and government entities, and small businesses with gross receipts of $5 million or less. Penalty rates range for $30 to $530 per return, with a maximum penalty of $3,218,500 for large businesses and $1,072,500 for small businesses (with the exception of intentional disregard) State penalties vary; check with state authorities for details.
Note that if the filing date falls on a weekend or national holiday, the filing is due the first normal business day following. For example, if Jan. 31 falls on a Saturday, the due date would be Monday, Feb. 2.
The IRS also changed the procedure for requesting an extension to file W-2s. Only one 30-day extension to file Form W-2 is available, and this extension is not automatic. If an extension is required, a Form 8809 Application for Extension of Time to File Information Returns must be completed as soon as possible, and no later than Jan. 31.
See how SmartLinx simplifies payroll management, including regulatory reporting, end-year reports and W-2s, and Affordable Care Act compliance.
About the Author
As Compliance Expert at SmartLinx, Tom Jegou oversees SmartLinx innovations in our payroll and compliance systems. Tom is focused on transforming client needs into leading-edge products. Tom leads cross-functional teams from a product's conception through to its launch. Tom led the design of the 1095-C and Payroll-Based Journal reporting features in the WorkLinxTM suite. Since 1996, Tom has worked with every aspect of Human Capital Management Systems. He has defined, supported, implemented and managed Payroll, Time and Labor and HR systems. Tom is a Certified Payroll Professional through American Payroll Association.More Content by Tom Jegou