Did you know employers can face fines if W‑2s are sent late or not provided to employees? Making sure both your team and the Social Security Administration get accurate W‑2s on time is crucial to staying out of the IRS’s crosshairs. But if something slips through the cracks, it’s important to understand the consequences and how to fix it.
🔍 W‑2 Penalty Essentials
- Due date: W‑2s must be delivered to employees and filed with SSA by January 31 each year.
- Penalties: From $60 per incorrect or late W‑2 for the 2024 tax year up to escalating levels.
- Extensions: You may apply for more time with Form 8809, pending IRS approval.
- Willful neglect: Failing intentionally to file could trigger penalties of $660 per W‑2 for 2024.
This guide outlines why the IRS fines employers, how much those fines are, and tips to avoid them entirely.
Missed the Deadline? Know the Scores
When penalties apply:
Employers are penalized if they:
- Don’t issue W‑2s by January 31, and
- Fail to submit W‑2/W‑3 to the SSA by that date.
According to CPA Romeo Razi, owner of TaxedRight and former IRS agent—penalties depend on “how many W‑2s are late and how late they are.”
Errors on W‑2 forms (like wrong amounts or info) can result in fines per employee, making compliance especially important for larger payrolls. If you realize you missed the deadline, Razi advises: “file the missing W‑2 immediately.”
You’ll likely need to file corrected documents, amended W‑3 and possibly adjusted Forms 941—to ensure all payroll records match precisely.
How Late is Too Late? Penalty Chart
For the 2024 tax year, penalties for late W‑2s range from $60 to $660 per form, depending on when they’re filed:
| When Filed | Penalty per W‑2 | Maximum (small biz) | Maximum (other) |
|---|---|---|---|
| ≤ 30 days late | $60 | $232,500 | $664,500 |
| 31 days late through Aug. 1 | $130 | $664,500 | $1,993,500 |
| After Aug. 1 | $330 | $1,329,000 | $3,987,000 |
| Intentional disregard | $660 | No maximum | No maximum |
If January 31 falls on a weekend or holiday, the following business day becomes the deadline.
Why the IRS Pays Close Attention
Razi notes:
“Payroll taxes and W‑2s are the IRS’s sacred cow… they’re the least forgiving about these, and penalties come fast.”
Accurate and timely filing isn’t optional, prioritize diligence here to avoid triggering IRS scrutiny.
Additional Reasons for Penalties
Late filing isn’t the only issue, mistakes that might trigger fines include:
- Typos or missing information
- Failing to e-file when required
- Incorrect or missing Tax Identification Numbers
- Paper forms not machine-readable
Possible Relief: Reasonable Cause Exemptions
The IRS may waive penalties under certain circumstances, such as:
- Natural disasters
- First year in business
- Serious illness or death of the responsible party
- Other unforeseen hardships
To qualify, you must file Form 8809 and explain your situation clearly.
State-Level Penalties
States often have their own W‑2 rules. For instance:
- Georgia: $10–$50 per late W‑2
- Illinois: $5 per form, with mandatory e-filing
Check your state’s Department of Revenue for specifics.
How to Avoid W‑2 Penalties
For peace of mind:
- Keep accurate employee data, names, SSNs, addresses.
- Ensure W‑2 figures match your payroll filings.
- E-file if you have 250+ W‑2s.
- Implement a clear payroll workflow, especially if you’re using a payroll service like Beyond.
Need More Time? Use Form 8809
Form 8809 allows requesting a 30‑day extension, but approval isn’t automatic. Show the IRS that the delay was due to a legitimate issue, such as:
- A catastrophic event
- Lack of access due to illness or disaster
- Being in your first year of business
Approval is not guaranteed.
Final Advice
- Review your payroll records for accuracy before January 31, every year.
- Use W‑2 issuance and submission templates to stay organized.
- If you rely on a payroll provider, confirm their deadlines and safeguards.
- Stay updated—penalties change periodically with inflation.
Taking proactive steps, including using payroll tools like Beyond, can help you avoid costly penalties and keep your business compliant.
