With the New Year right around the corner, you’re already developing a new business strategy that will help you thrive in January. However, don’t forget that your tax forms are due this month, one of which is form W-2.
Filing W-2 forms is key to complying with the Internal Revenue Service (IRS) and Social Security Administration (SSA). This article will explain three ways to send your W-2 forms.
3 Ways to Send W-2 Forms to Employees
Let’s dive right into the three ways you can send your W-2 forms to employees.
The most convenient way to distribute W-2 forms to your team members if they work from your office is to do so in person. There are several ways to submit the paperwork. In most cases, you want to use your accounting software to generate the documents and print them using your office printers. Alternatively, ask your accounting firm to do the work for you.
Keep in mind that you don’t need a special type of paper or formatting, making this way of submitting forms different from IRS filings. That said, you should put your W-2 forms in envelopes to keep prying eyes from observing sensitive information. Preferably, go for privacy envelopes for extra security.
Furthermore, don’t forget to notify your employees when the forms are ready. The onus is on you as the owner to ensure each worker receives their W-2 by the deadline, which is January 31 of next year for most states.
Mailing Physical Copies
If some of your workers are remote, physical delivery isn’t an option. However, you can mail physical copies to your staff.
You can take two courses of action here: hand over the W-2s yourself using your accounting software or outsource the job to your accounting agency or any other payroll provider.
The latter might be more convenient because it means less work on your part. The company performs every step of the submission, from generating the forms to sending them to your employees. The provider will usually offer to dispatch the paperwork straight to your team members’ doors, leaving you out of the process altogether.
While this saves you a lot of time, it may not be smart from a privacy perspective. The firm might use regular envelopes, exposing your employees’ Medicare information, social security numbers (SSNs), earnings, benefits, and other sensitive data. As a result, you may want to transmit the documents yourself because you’ll definitely use privacy envelopes.
Another great idea is to ensure your paperwork is couriered with insurance. The United States Postal Service (USPS) offers insurance of up to $5,000 to compensate you in case of paperwork loss.
Also, if you issue your W-2 forms by mail, you’ll need to dispatch them with a W-3 form, which summarizes the total withholding amounts and wages.
Electronic Delivery Methods
Whenever a W-2 form is mailed, you may still have qualms about the service. Yes, you provide the courier with a privacy envelope, but who knows, they might peek inside anyway. Even worse, they could misplace the documents, which is a common occurrence if they’re new.
To avoid the risks and make sure your paperwork is submitted before the deadline, use electronic delivery. It’s perfect if you have a remote workforce, but you’ll need written consent from your employees to send them W-2 forms.
There are two ways to send digital versions of your W-2s. Most business owners do so through their employee self-service portals. These platforms have intuitive interfaces where employees can access their paychecks, state and federal withholdings, and, most importantly, download W-2 and any other tax form, such as W-9s and W-4s.
Self-service portals generally notify your team members when you upload W-2s, but you may need to inform them yourself. And there’s no need to ask their permission separately – many programs enable users to sign consents when receiving their forms.
If a self-service portal isn’t available, you can transmit your forms by email. This is pretty straightforward, but it can be time-consuming if you have a large enterprise.
Plus, keep in mind that electronic form delivery is prone to security concerns. That’s why you should share your forms with passwords to prevent others from accessing the information. Rather than generate passcodes from scratch, consider using the employee’s zip code and the last few digits of their SSNs.
Electronic W-2 Filing With the Social Security Administration
Besides confirming your W-2 form is provided to employees, you also need to ensure the paperwork is forwarded to the IRS. The organization that sends your W-2s to the IRS is the SSA, which is why you need to provide them with the copies.
The fastest and most secure way to do so is to submit the forms electronically.
Benefits of E-Filing W-2 Forms
E-filing your W-2s to the SSA is one of the smartest decisions you can make as a business owner. Here’s why:
- No risk of paperwork loss – E-filing eliminates the need for couriers or any other intermediary. As such, it protects your W-2s from theft and loss.
- Easy access – Posting your W-2s on the SSA portal enables your employees to access their documents on a user-friendly website.
- Reprinting available – Chances are, your employees will need multiple versions of their W-2 forms. E-filing is the perfect solution because it makes W-2s available for reprinting whenever necessary.
- Higher security – The SSA Employee Dashboard protects your W-2s with your employees’ username, password, and other security measures.
- Acknowledgment of receipt – The SSA acknowledges successful filings, so you never have to worry about whether your W-2s actually reach their destination.
- Automatic W-3 submission – Each electronic W-2 filing with the SSA is accompanied by a W-3 submission. The SSA automatically generates this form, so you don’t have to send it separately.
E-filing is advantageous but also obligatory in some cases. Since 2021, if you file at least 250 W-2s for the previous calendar year, the IRS mandates you to do so electronically unless you qualify for a waiver. The IRS may fine you if you don’t comply with this requirement.
How to E-File W-2 Forms
Now that you know why filing W-2 forms electronically is so beneficial, you now need to learn how to submit the information to the SSA:
- Head to the SSA Business Services website.
- Log in with your credentials or create an account.
- Upload your wage report in the required format.
- Return to the homepage and choose “Report Wages to Social Security.”
- Follow the on-screen instructions to generate your W-2s.
The SSA lets you generate up to 50 W-2s. You can access them anytime and print physical copies for your employees.
And don’t panic if you make a mistake when filing the forms. The SSA allows you to correct errors after the submission, including SSN mismatches and wrong names. Most importantly, the portal confirms if the SSA has accepted your filing.
Requirements for Electronic Consent
The IRS has special requirements for employees’ electronic consent. If they provide their consent electronically, according to the IRS, you must receive the consent in a way that proves the employee can access the statement in the same format in which it’ll be delivered.
There are different ways of providing electronic consent forms, depending on your platform, but most programs work the same:
- Accessing your company’s intranet.
- Logging into the portal with a username and password.
- Navigating to tax forms and selecting W-2s.
- Checking the box next to “Consent to electronic delivery” (the wording may vary, depending on your software).
If your staff has difficulty finding the consent form, your HR should help them solve the problem.
Mailing W-2 Forms to the SSA
Electronic filing is trackable, automated, and expedited. But what if you’re not tech-savvy and don’t know how to use the SSA portal? Paper-based submissions are your only option. In other words, you’ll need to mail your W-2s.
Where to Find the Correct Mailing Address
You can find the correct W-2 mailing address on this SSA website. Once you go through the information, you’ll learn that you can send W-2s through your post office to the following address:
Direct Operations Center
Wilkes-Barre, PA 18769-0001
For last-minute submissions, the SSA requires you to forward your forms to Federal Express or UPS. These services will deliver the paperwork overnight at a different address:
Direct Operations Center
ATTN: W-2 Process
1150 E. Mountain Drive
Wilkes-Barre, PA 18702-7997
Alternatively, if you use regular mail, here’s the correct submission address:
Direct Operations Center
P.O. Box 3333
Wilkes-Barre, PA 18767-3333
How to Prepare W-2 Forms for Mailing
Whether a W-2 is dispatched through express service or is distributed in a sealed envelope via regular mail, it’s essential to prepare your forms before submitting them. The first step is to understand where to file each copy:
- Copy A – You send this copy to the SSA using a red form (red scannable ink).
- Copy 1 – Your locality, city, or state receives Copy 1.
- Copy B – You use Copy B to file your employees’ federal tax returns.
- Copy C – You forward Copy C for your employees’ records.
- Copy 2 – You send Copy 2 as another copy for your locality, city, or state.
- Copy D – You keep the final copy for your records.
Now let’s take a look at the information you have to provide in each section.
No W-2 is complete without employer information. This is where you insert data about your company, including the name of your entity, address, and employer identification number (EIN).
Many payroll departments use control numbers to distinguish one W-2 from another. It normally has a 10-digit format with a blank between the first five and second five figures (e.g., 12345 19876). You can assign control numbers yourself or let your payroll provider/platform generate them.
The most important part of your W-2 is employee earnings. Use this section to specify how much each employee made in the previous year as well as their tax withholdings. Typically, you’ll need to fill out eight boxes here:
- Box 1 – Gross pay for all your salaried and hourly team members, including their tips, wages, and other forms of compensation
- Box 2 – Gross withholding amount
- Box 3 – Gross social security wages
- Box 4 – Gross social security tax withholdings
- Box 5 – Gross Medicare tips and wages
- Box 6 – Medicare tax withholdings, including any additional Medicare taxes for your higher-paid employees
- Box 7 – Social security tips
- Box 8 – Allocated tips
From there, provide information about your team members, including their total wages, tax withholdings, and any other payments they may have received from January to December. These additional payments include dependent care benefits and earned income tax credit (EIC) allocations.
Next up is the retirement plan information for your workforce. For each employee, you’ll need to check the boxes that apply to their retirement plan:
- Box 13 – The employee has a retirement plan (check the corresponding boxes if it’s a statutory employee who’s earned third-party sick payments).
- Box 11 – The employee’s plan doesn’t qualify.
Once you enter the basic retirement details, move on to Box 12, which contains other types of compensation related to your staff’s retirement solutions. W-2 forms generally allow you to choose up to four kinds of compensation.
Here are some of your options:
- Effective 403(b) or 401(k) deferrals (or any other eligible retirement plans)
- Golden parachute allocations
- Uncollected railroad retirement, life insurance, Medicare tip tax, or social security
- Tax-exempt sick pay
- 403(b) or 401(k) Roth contributions
- Contributions to health savings or medical savings accounts
- Excludable moving expenses
- Price of employer health coverage under DD, as required by the Affordable Care Act
Box 14 contains other types of compensation or deductions you have to disclose to your team members for tax returns:
- Vehicles costs included in employee wages (e.g., lease amounts for vehicles)
- Non-taxable income
- Uniform deductions (cost of work uniforms)
- Union due deductions
- Fringe benefit and health insurance deductions
- Auto reimbursements
- After-tax pension
- Charitable contributions deductible from employee wages
- Special taxes in Washington, New Jersey, New York, or California
- Other amounts deducted from your employees not covered by the previous items
Local and State Information
The final section on your W-2 forms is local and state information. Here, you enter data about local and state wages as well as relevant withholdings. W-2s typically include boxes for two localities and two states, which is necessary for employees who have worked in multiple places during the year. If you need three or more localities or states, use an additional W-2.
This section consists of six boxes:
- Box 15 – The company’s tax ID and two-letter state symbol (e.g., CA for California)
- Box 16 – State wages
- Box 17 – Income tax withholdings
- Box 18 – Any local wages
- Box 19 – Local tax withholdings
- Box 20 – Name of the locality
Securely Sending W-2 to Employees
When a W-2 is uploaded to a portal, you don’t need to worry about whether or not it’s been intercepted by a third party. The SSA utilizes a secure platform that is encrypted for protection, which eliminates the risk of data theft.
But things are a little different if you take the manual route. Before a W-2 is handed over in person, you need to take proper security measures to prevent information loss.
Best Practices for Protecting Sensitive Information
Take the following tips to shield sensitive information when handing in W-2 forms:
- Restrict access to W-2s.
- Store your W-2 electronically in a secure database.
- Encrypt messages if you’re sending W-2s by mail.
As hand deliveries are particularly risky, you need to take additional steps to safeguard your data:
- Use sealed envelopes to keep others from inspecting the content.
- Hand in W-2 privately, away from prying eyes.
- Only print additional copies if the employee loses the original form.
Secure Electronic Transmission
Electronic W-2 transmissions are secure by default, but there are a few ways to further enhance security:
- Protect W-2 forms with strong passwords that include uppercase and lowercase letters, symbols, numbers, and special characters (e.g., #, ^, &).
- Don’t store usernames and passwords you use to access W-2s electronically in your Browser. Instead, write down the credentials on a piece of paper and lock it away. Alternatively, enter the information in your smartphone notes and secure them with another password.
- There are three ways to send W-2 forms: in person, by mail, and electronically. Electronic delivery is the fastest and most secure method. The SSA has a safe business portal that lets you file rapidly without worrying about cybersecurity breaches.
- The deadline for submitting W-2 forms for employers for 2024 is January 31 for most states. Late filings are subject to fines and other penalties.
- It’s crucial to provide accurate information on your W-2s to avoid penalties and ensure timely submissions for you and your employees.
- Secure your electronic W-2 transmissions with passwords and put physical copies in privacy envelopes before sending them.
Frequently Asked Questions
What Should You Do If an Employee Has Not Received Their W-2?
If your employee hasn’t received their W-2 form, you should check if you’ve submitted the form correctly. Go to your SSA business portal profile and see if you can access the copy. If not, you’ll need to resubmit. If you’ve mailed the document, contact the postal service to check if they’ve delivered it.
Reach out to the IRS as a last resort at 1-800-829-1040. To determine the status of your W-2, they’ll ask for your business name, address, as well as information about the employee who hasn’t received their form, including their wages and withholdings.
Can Employers Charge a Fee for Duplicate W-2 Requests?
Yes. Employers can charge a fee for duplicate W-2 requests, especially if they need them for non-social security purposes. A fee makes sense since it takes a lot of time to generate and forward another form.
How do Employers Handle W-2 for Terminated Employees?
If an employee is laid off before December 31 of the year to which the W-2 applies, the employer may send a copy at any time after the termination but no later than January 31 of the following year. If the employee requests their form, the employer must issue it within a month of the request or within a month after the final wage, whichever is later.