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Understanding Form W-2: Wage and Tax Statement for Employers

Posted by Jonathan Ciccotelli on Jan 21, 2016 11:14:51 AM

Understanding_W2s_for_Employers.jpgEvery employer is required to report wages paid as well as the related withholdings on Form W-2 each year. If filing 250 or more Forms W-2 for 2015, employers must file Copy A in electronic format with the Social Security Administration. It is important to note that the IRS can grant employers a waiver of the electronic filing requirement upon receipt and approval of a written request. Form W-2 is a six part form that is to be distributed as follows.

Copy A

This section of the Form W-2, along with Form W-3, is due to the Social Security Administration by February 29, 2016. If filing electronically, the due date is extended to March 31, 2016. These forms should also be left unstapled and unattached from one another. Automatic extensions for 30 days to file Form W-2 can be requested with the Social Security Administration by sending Form 8809. Regardless, Form W-2 will need to be delivered to your employees by February 1, 2016.

Copy 1

Ohio Form IT-3 is due February 29, 2016. By filing Copy 1, employers are no longer required to send the state paper copies of Ohio Form IT-2 or federal Form W-2 or Form 1099-R. These records however must be maintained for a period of four years from the due date. Employers can elect to send the state W-2 and 1099-R information on magnetic media. If you do not do so, The Ohio Department of Taxation may periodically request W-2s when conducting compliance programs.

You local tax district may also require a copy with a similar transmittal form and due date, so be sure to ask your Meaden & Moore tax professional in order to help ensure you are filing correctly.

Copy B, Copy C, & Copy 2

All three of these sections are due to the employee by February 1, 2016.

Copy D

Copy D should be retained by employers in order to maintain records appropriately.

Special Boxes

In addition to the six parts above, there are some special boxes on Form W-2 that employers should pay attention to.

Box 11 Nonqualified Plan

This section reports any distributions from the nonqualified plan reported in Box 1.

Box 12 Codes

These codes refer to elective deferrals and other codes A-EE that are to be inputted on lines 12a-12d of Form W-2. Code DD is used to report the cost of employer-sponsored health coverage and the associated amount is not taxable. If you are an employer filing less than 250 Forms W-2 for the previous calendar year will not be required to report the cost of employer-sponsored health care on 2015 forms.

Generally speaking, the amount reported should include both the portion paid by the employer and the portion paid by the employee.

Box 13 Checkboxes

The retirement plan box should be checked if the employee was an active participant for any part of the calendar year, while the third-party sick pay box should be checked if you are the third-party sick pay payer or the employer reporting sick pay payments was made by a third party.

Box 14

The lease value of a vehicle must be reported in this section of the W-2. If other employee information reporting, such as health insurance premiums deducted, occurs, Box 14 can be used. Make sure to label any reporting that occurs within this section appropriately.

Interested in learning more about filing your 2015 taxes? Click on the button to download our comprehensive 2015 Tax Advisory. The guide is filled with helpful tips, tax breakdowns, charts, and examples in order to help make filing your taxes a little easier.

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Topics: Tax Planning & Strategies

Jonathan Ciccotelli

Jonathan Ciccotelli

Jonathan Ciccotelli is the Partner-In-Charge of Meaden & Moore’s Tax Services Group. For over 29 years, Jonathan has worked closely with private and public companies in manufacturing, transportation, distribution, construction, and retail under a variety of business structures, including S-corporations, C-corporations, consolidated groups, and limited liability companies. He enjoys running, cycling, and cheering on his kids at sporting events.