A penalty for an employer not sending a W-2 form typically comes as a fine, with the amount varying depending on the circumstances and the degree of non-compliance. Employers must provide copies of Form W-2 to the IRS, SSA, and their employees, allowing them to file their taxes correctly.

The IRS uses penalties to ensure employers fulfill their duties and help workers meet their tax obligations. In this article, we’ll learn what Form W-2 is and who it’s for, when the employer should send it, what the penalties for not doing so are, and what employees can do if they don’t receive these forms.

Key Takeaways

• Form W-2, or the Wage and Tax Statement, is a tax document sent to the IRS, SSA, and employees, outlining all annual payments and withheld taxes.
• W-2 forms should be sent by January 31 (unless employers file for an extension) for every employer on a company’s payroll.
• Penalties for missing the W-2 deadline range from $60 to $660 per employee, depending on non-compliance severity.
• You can avoid missing a deadline and ensure tax document compliance by setting internal deadlines, using online generators, and submitting them in electronic form.

What Is a W-2 Form, and Who Is It For?

A Form W-2 (officially known as the Wage and Tax Statement) is a tax document that contains information about all payments and withheld taxes for an employee.

Employers must file these documents with the IRS and SSA (Social Security Administration) for each employer they’ve paid $600 or more in a year. A copy should also be sent to each employee to help them file their taxes.

In addition to the employee’s total annual earnings, Form W-2 should also have details about federal, state, and local taxes withheld, Social Security and Medicare contributions, and other contributions (e.g., to flexible spending accounts, tuition assistance, health savings accounts, etc.).

A Form W-2 is given to employees on the company’s payroll—company workers who receive regular wages and have taxes withheld by their employers. They aren’t given to independent contractors and gig workers who are responsible for their own taxes—they typically receive Forms 1099.

You also shouldn’t file a Form W-2 if you’re a single-member LLC or a sole proprietor with no one on the payroll but yourself.

When Should Employers Send W-2 Forms?

Employers must send W-2 forms by January 31 each year. If the postmark is dated before that, a physical copy can arrive at the IRS and SSA a few days later.

Many businesses opt for electronic forms, which are more cost-effective and easier to create, manage, and file. Employees often prefer these forms, as well, as they are simpler to store and access and can always be printed if needed. If an employer is filing a digital copy of a W-2 Form, they must do it no later than January 31.

Sometimes, employers can file Form 8809 for a 30-day extension on the W-2 tax filing deadline. These instances include:

• Catastrophic events that were declared a disaster (including fires, casualties, and similar).

• Death, serious injury, or unavoidable absence of the person in charge of filing Form W-2.

• Filer’s first year of doing business.

• Justified lack of necessary information needed to prepare Form W-2 in time (e.g., Form 1042-S or Schedule K-1).

If the employer is late sending Form W-2 or files documents with incorrect information, they will have to pay a fine. Therefore, it’s advisable to file for an extension if you think you’ll need it, even if you don’t use it.

Penalties for Employers Not Sending W-2 Forms on Time

The penalties for employers not sending W-2 forms on time are usually fines that increase with delay and the severity of non-compliance. In fact, according to Section 7203 of the Internal Revenue Code, employers who willfully fail to supply tax information can be charged with felonies.

Here are the most common IRS penalties for late W-2 filing:

• $60 per W-2 per employee, if the employer is late 30 days or less. The maximum penalty was up to $232,500 for small businesses or $664,500 annually in the 2024 tax year.

• $130 per W-2 per employee, if the employer is more than 31 days late through August 1. The maximum penalty was up to $664,500 for small businesses or $1,993,500 annually in the 2024 tax year.

• $330 per W-2 per employee, if the employer files forms after August 1. The maximum penalty was up to $1,329,000 for small businesses or $3,987,000 annually in the 2024 tax year.

• $660 per W-2 per employee, if the employer intentionally doesn’t file forms. In this case, there’s no maximum limit to the penalty.

Since the amounts and penalties for employers not sending W-2 can change, you should always refer to the official IRS guidelines on information return penalties to ensure you have the correct details relevant to the current tax year.

In addition to IRS penalties, state-specific W-2 late filing penalties can also exist. For instance, according to the Minnesota Department of Revenue, the employer can receive a $50 penalty (up to $25,000 per year) if it doesn’t provide Form W-2 or Form 1099, submits a false form, or refuses to provide the information required on W-2.

What Can Employees Do If They Don’t Receive Their W-2 Forms on Time?

If employees don’t receive their W-2 forms on time, there are several steps they can take to ensure tax compliance. Let’s see what they are:

#1. Contact the Employer

The first step should be to contact the employer or a relevant HR or payroll administration department about the missing W-2. In many cases, employees haven’t received their W-2 forms due to logistics problems, such as mailing issues or administrative mistakes. Employers can resend the forms or give employees access to electronic versions through an online portal.

Suppose an employee leaves the company or changes their contact details. In that case, they should send updated information to their employer and remind them that they are legally obligated to provide their Form W-2.

Most of the time, an inquiry or a reminder can fix the problem and ensure W-2 compliance from the employers. If it doesn’t, employees should take further action.

#2. Request a Replacement

If an employer sends Form W-2, but it gets lost or has incorrect information (e.g., due to payroll reporting errors), an employee can ask for a replacement copy. Many employers create digital W-2 forms, so they can easily correct mistakes and send you a new copy.

Besides that, some employers distribute W-2 forms through online platforms, so you can ask for your form to be corrected to receive the document you need.

#3. File Form 4852

If the employer doesn’t respond to your inquiries by the end of February, you should file Form 4852, a substitute for Form W-2. If you’re unsure how to proceed, contact the IRS via phone or get in-person help at your local IRS Taxpayer Assistance Center.

The Form 4852 is made explicitly for instances when employers don’t issue Form W-2 or issue an incorrect one. The document helps you estimate your earnings and file your taxes on time.

If you’ve already filed your taxes and realized that the Form W-2 you received contained mistakes, you should file an amended return. This is done via Form 1040-X, in case you notice changes in your income, payroll deductions, tax liability, and other relevant details.

#4. Report the Employer to the IRS

If your employer remains non-compliant after all these steps, you should report them to the IRS by calling 800-829-1040. You should prepare all the relevant information about them and your work at the company, such as the names, addresses, and phone numbers of you and your employer, the dates when you worked for them, and your Social Security number.

The IRS will contact your employer to request missing W-2 forms while sending you a copy of Form 4852 in case the employer doesn’t respond favorably.

How Can Employers Avoid Sending W-2 Forms Late?

There are several strategies and practices employers can use to avoid sending W-2 forms late. These include:

#1. Use a W-2 Generator

Using a software W-2 generator, you can create these documents with ease and precision. This significantly reduces the time and effort required to make and send Form W-2 to the IRS, SSA, and employees.

At Paystubs.com, we offer a robust and user-friendly online Form W-2 generator you can use to expedite the crafting process and meet the January 31 W-2 deadline with minimal effort.

You can create as many W-2 forms as you like in three simple steps:

1. Choose the Form W-2 generator from the main page (we also offer a 1099 generator, paystub generator, and invoice generator)
2. Input relevant information in predesignated spaces and select the layout that suits your needs
3. Preview your document and use checkout to download it.

#2. File W-2s Electronically

Filing W-2s electronically is a secure way of sending tax documents faster and more conveniently than physical copies. Electronic filing reduces the chances of logistics mistakes, such as postal delays or lost packages.

Moreover, if the employer files 10 or more tax documents, including Form W-2, they are obligated to do so electronically unless the IRS explicitly allows otherwise. By filing W-2 forms electronically, employers and employees can receive instant verification of a successful or unsuccessful submission.

#3. Establish Internal Deadlines

Employers should have clear internal deadlines for preparing and distributing W-2 forms. By sticking to an established schedule, they’ll leave enough time in case of unforeseen circumstances (e.g., if they need to correct mistakes or generate new documents).

In general, it’s good to have relevant employee tax documents, W-2 forms, and other paperwork finalized by the middle of January. In combination with electronic filing, this reduces the risk of having to make critical last-minute changes.

#4. Request a 30-Day Extension in Advance

If you have grounds to ask for a 30-day extension, you should do so even if you’re fairly confident that you’ll file W-2 forms on time. The extension will give you much-needed leeway and prevent accidental penalties if you run late.

Final Thoughts

Penalties for employers not sending W-2 are implemented to facilitate payroll tax reporting, help employees file their taxes, and disincentivize fraud. Failure to fulfill employer tax obligations will result in fines that escalate with non-compliance severity.

As such, it’s recommended for businesses to take steps to prevent missing January 31 deadlines. If you must file Form W-2 for one or more employees, consider setting a clear schedule that gives you enough time for corrections and unforeseen circumstances. Remember that you can also use a W-2 generator and electronic filing to make the process smoother.

Penalty for Employer Not Sending W-2 FAQ

#1. Can I sue my employer for not giving me my W-2 form?

You can’t sue your employer directly if they don’t give you your W-2 form, but you should report them to the IRS. The IRS will contact the employer to request the missing Form W-2 while giving you a copy of a Form 4852, which you can use as a substitute to file your taxes.

#2. Will the IRS catch a missing W-2 form?

Yes, the IRS will most likely catch a missing Form W-2. Employer W-2 responsibilities include sending it to you, the IRS, and the SSA, which means these institutions will have the information about your earnings even before you file your taxes.

#3. What happens if my employer refuses to send my W-2?

If your employer refuses to send you your W-2, and you’ve already contacted them about it, you should contact the IRS and provide relevant details about you and the employer. The IRS will contact your employer while giving you Form 4852 to help you file your taxes without Form W-2.

#4. How can I create a W-2 if my employer didn’t send one?

You can’t create a Form W-2 on your own, but you can complete Form 4852 by using your pay stubs to estimate your earnings. This will help you meet the tax filing deadline, though the information you provide might not be entirely correct and could result in further adjustments.