Instructions For Forms W-2 And W-3 - Wage And Tax Statement And Transmittal Of Wage And Tax Statements - 2017 Page 13
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33employees showing the sick pay. For specific reporting
contributions relate, and the amount contributed for each
instructions, see section 6 of Pub. 15-A.
year.
SIMPLE retirement account. An employee's salary
Virtual currency. For federal tax purposes, virtual
reduction contributions to a SIMPLE (savings incentive
currency is treated as property. Bitcoin is an example of
match plan for employees) retirement account are not
virtual currency. Transactions using virtual currency (such
subject to federal income tax withholding but are subject
as Bitcoin) must be reported in U.S. dollars.
to social security, Medicare, and railroad retirement taxes.
The fair market value of virtual currency (such as
Do not include an employee's contribution in box 1, but do
Bitcoin) paid as wages is subject to federal income tax
include it in boxes 3 and 5. (Use box 14 if railroad
withholding, FICA tax, and FUTA tax and must be
retirement taxes apply.) An employee's total contribution
reported on Form W-2. Notice 2014-21, 2014-16 I.R.B.
also must be included in box 12 with code D or S.
938 describes how virtual currency is treated for federal
An employer's matching or nonelective contribution to
tax purposes and is available at
IRS.gov/irb/2014-16_IRB/
an employee's SIMPLE retirement account is not subject
ar12.html.
to federal income tax withholding or social security,
Penalties
Medicare, or railroad retirement taxes, and is not to be
The following penalties apply to the person or employer
shown on Form W-2.
required to file Form W-2. The penalties apply to both
For more information on SIMPLE retirement accounts,
paper filers and e-filers.
see Notice 98-4, 1998-1 C.B. 269. You can find Notice
98-4 on page 25 of Internal Revenue Bulletin 1998-2 at
Employers are responsible for ensuring that
IRS.gov/pub/irs-irbs/irb98-02.pdf.
Forms W-2 are furnished to employees and that
!
Forms W-2 and W-3 are filed with the SSA
Successor/predecessor employers. If you buy or sell a
CAUTION
correctly and on time, even if the employer contracts with
business during the year, see Rev. Proc. 2004-53 for
a third party to perform these acts. The IRS strongly
information on who must file Forms W-2 and employment
suggests that the employer's address, not the third party's
tax returns. Rev. Proc. 2004-53, 2004-34 I.R.B. 320, is
address, be the address on record with the IRS. This will
available at IRS.gov/irb/2004-34_IRB/ar13.html.
ensure that you remain informed of tax matters involving
Terminating a business. If you terminate your business,
your business because the IRS will correspond to the
you must provide Forms W-2 to your employees for the
employer's address of record if there are any issues with
calendar year of termination by the due date of your final
an account. If you choose to outsource any of your payroll
Forms 941, 944, or 941-SS. You also must file Forms W-2
and related tax duties (that is, withholding, reporting, and
with the SSA by the last day of the month that follows the
paying over social security, Medicare, FUTA, and income
due date of your final Forms 941, 944, or 941-SS. If filing
taxes) to a third party payer, visit IRS.gov and enter
on paper, make sure you obtain Forms W-2 and W-3
“outsourcing payroll duties” in the search box for helpful
preprinted with the correct year. If e-filing, make sure your
information on this topic.
software has been updated for the current tax year.
Failure to file correct information returns by the due
However, if any of your employees are immediately
date. If you fail to file a correct Form W-2 by the due date
employed by a successor employer, see Successor/
and cannot show reasonable cause, you may be subject
predecessor employers above. Also, for information on
to a penalty as provided under section 6721. The penalty
automatic extensions for furnishing Forms W-2 to
applies if you:
employees and filing Forms W-2, see Rev. Proc. 96-57,
Fail to file timely,
which is on page 14 of Internal Revenue Bulletin 1996-53
Fail to include all information required to be shown on
at IRS.gov/pub/irs-irbs/irb96-53.pdf.
Form W-2,
Get Schedule D (Form 941), Report of
Include incorrect information on Form W-2,
Discrepancies Caused by Acquisitions, Statutory
TIP
File on paper forms when you are required to e-file,
Mergers, or Consolidations, for information on
Report an incorrect TIN,
reconciling wages and taxes reported on Forms W-2 with
Fail to report a TIN, or
amounts reported on Forms 941, 941-SS, 943, or 944.
Fail to file paper Forms W-2 that are machine readable.
The amount of the penalty is based on when you file
Uniformed Services Employment and Reemployment
the correct Form W-2. Penalties are indexed for inflation.
Rights Act of 1994 (USERRA) makeup amounts to a
The penalty amounts shown below apply for filings due
pension plan. If an employee returned to your
after December 31, 2017. The penalty is:
employment after military service and certain makeup
$50 per Form W-2 if you correctly file within 30 days of
amounts were contributed to a pension plan for a prior
the due date; the maximum penalty is $536,000 per year
year(s) under the USERRA, report the prior year
($187,500 for small businesses, defined in Small
contributions separately in box 12. See the TIP above
businesses).
Code D in Box 12—Codes. You also may report certain
$100 per Form W-2 if you correctly file more than 30
makeup amounts in box 14. See Box 14—Other in
days after the due date but by August 1; the maximum
Specific Instructions for Form W-2.
penalty is $1,609,000 per year ($536,000 for small
Instead of reporting in box 12 (or box 14), you may
businesses).
choose to provide a separate statement to your employee
$260 per Form W-2 if you file after August 1, do not file
showing USERRA makeup contributions. The statement
corrections, or do not file required Forms W-2; the
must identify the type of plan, the year(s) to which the
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General Instructions for Forms W-2 and W-3 (2017)
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