Editorial · January 20, 2017
W-2 Filing Deadline: January 31 Rules for Employers
The W-2 filing deadline for wages paid in 2016 is January 31, 2017. That date applies to employers who file on paper and to those who file online. This guide covers the rule, who it reaches, and what to do this month.
What changed this year
In past years, employers had until the end of February to mail paper copies of Form W-2 to the Social Security Administration (SSA). Online filers had until the end of March. Those later dates are gone for 2016 forms.
The change came from the Protecting Americans from Tax Hikes (PATH) Act, signed in December 2015. Its goal is to fight tax refund fraud and identity theft. An earlier deadline gives the IRS time to match wage reports against the returns people file.
The IRS guide to filing Forms W-2 and W-3 says it plainly. The due date for filing 2016 forms with the SSA is now January 31, 2017, whether you file on paper or electronically.
Two deadlines, same day
Most employers have two jobs to finish by January 31. First, send each employee a copy of Form W-2. Second, send Copy A of every W-2 to the SSA, together with Form W-3. Form W-3 is the cover sheet that totals your W-2s.
You must file a W-2 for each employee who was paid $600 or more in the year. You must also file one for any employee who had income tax, Social Security tax or Medicare tax withheld, even if the pay was less.
Make sure the employer name and employer identification number (EIN) on your W-2 and W-3 match what you used on Form 941 or your other payroll tax returns. A mismatch can cause trouble later.
The 1099-MISC change
The same law moved the date for some contractor forms. If you paid a person who is not your employee and you report it in box 7 of Form 1099-MISC (nonemployee compensation), the form is also due January 31. You give the recipient a copy and file with the IRS by that date.
Other kinds of Form 1099-MISC keep the old dates for the IRS copy. Those are February 28 for paper filing and March 31 for online filing. If your business pays contractors, check the box number on every form before you plan your calendar.
Extensions are harder to get
There used to be an automatic extension for W-2s. Not anymore. For filings due on or after January 1, 2017, you may ask for one 30-day extension on Form 8809, Application for Extension of Time to File Information Returns.
The request is not a formality. You must explain in detail why you need more time and sign it under penalties of perjury. The IRS says it will grant it only in extraordinary circumstances or catastrophe, such as a natural disaster or a fire that destroys the records you need. You must send the request before the due date, and no second extension is allowed.
An extension to file with the SSA does not move the date for giving W-2s to your workers. They are still due to employees by January 31, unless the IRS separately grants more time to furnish them.
File online if you can
The SSA runs a free tool called Business Services Online (BSO) for filing W-2s electronically. It lets you type in the forms or upload a file. The IRS calls e-filing the faster path, and the SSA checks some errors for you.
If you must file 250 or more Forms W-2, you are required to file electronically. Filing on paper when you are required to e-file can bring a penalty.
Whichever way you file, the SSA will reject a wage report that has certain math mismatches. For example, Social Security tax is above zero while Social Security wages are zero. Check totals before you send.
What a late filing can cost
A late or incorrect W-2 can bring a penalty for each form. For 2016 forms, the IRS instructions list three tiers:
- $50 per form if you file correctly within 30 days of the due date, for example by February 28.
- $100 per form if you file correctly more than 30 days late but by August 1.
- $260 per form if you file after August 1 or never file.
Each tier has a yearly cap, and the caps are lower for small businesses, defined as those averaging $5 million or less in gross receipts over three years. Ignoring the rules on purpose costs at least $530 per form, with no cap. The penalties can be waived if you show reasonable cause.
A short checklist for this month
- Confirm every employee's name, address and Social Security number against your payroll records.
- Check that wage boxes tie to your Form 941 totals for 2016.
- Decide who gets a W-2 and who gets a 1099-MISC, and look for box 7 forms.
- Set up your SSA Business Services Online account early if you plan to e-file.
- Mail or e-file by January 31, and keep proof of the filing date.
If your payroll is handled by an outside provider, ask them now when your forms will be filed. The legal duty stays with you.
Sources
- Internal Revenue Service, General Instructions for Forms W-2 and W-3 (2016), irs.gov/pub/irs-prior/iw2w3--2016.pdf
- Internal Revenue Service, Instructions for Form 1099-MISC (2016), irs.gov/pub/irs-prior/i1099msc--2016.pdf
- Protecting Americans from Tax Hikes Act of 2015, Public Law 114-113, signed December 18, 2015
- Social Security Administration, Business Services Online, ssa.gov/bso