When do I need to issue W-2s to employees?

by | Jun 19, 2025 | Business Taxes, Payroll & Contractors

Here’s what HIVE AI had to say about “When do I need to issue W-2s to employees?”:

The requirement to issue Form W-2 to employees is governed by specific statutory and regulatory provisions that establish both the circumstances requiring issuance and the timing for providing these critical tax documents.

Basic Requirement for Issuing Form W-2

Every person required to deduct and withhold from an employee a tax under section 3101 or 3402, or who would have been required to deduct and withhold a tax under section 3402 (determined without regard to subsection (n)) if the employee had claimed no more than one withholding exemption, or every employer engaged in a trade or business who pays remuneration for services performed by an employee, including the cash value of such remuneration paid in any medium other than cash, shall furnish to each such employee in respect of the remuneration paid by such person to such employee during the calendar year, on or before January 31 of the succeeding year, or, if his employment is terminated before the close of such calendar year, within 30 days after the date of receipt of a written request from the employee if such 30-day period ends before January 31, a written statement IRC § 6051(a) containing specific wage and tax information.

The fundamental rule is that you must issue Form W-2 to any employee from whom you were required to withhold federal income tax, Social Security tax, or Medicare tax, or would have been required to withhold income tax if the employee had claimed only one withholding exemption. Additionally, any employer engaged in a trade or business who pays remuneration for services performed by an employee must furnish Form W-2, regardless of whether taxes were actually withheld.

Standard Filing and Furnishing Deadlines

Forms W–2 and W–3 and any returns or statements required by the Secretary to report nonemployee compensation shall be filed on or before January 31 of the year following the calendar year to which such returns relate. IRC § 6071(c) This means that for wages paid during 2024, you must file Form W-2 with the Social Security Administration and furnish copies to employees by January 31, 2025.

The regulatory framework reinforces this timing requirement. Each statement required by this section for a calendar year and each corrected statement required for the year shall be furnished to the employee on or before January 31 of the year succeeding such calendar year. IRS IRM 4.23.9 Employment Tax Penalty, Fraud, and Identity Theft Procedures This unified deadline for both filing with the SSA and furnishing to employees represents a significant change from earlier years when different deadlines applied.

Special Circumstances and Early Issuance

Employment Termination Before Year-End

When an employee’s employment terminates before December 31, special rules apply for early issuance of Form W-2. If an employee whose employment is terminated before the close of the calendar year requests the employer to furnish the Form W-2 at an earlier time, the employer must furnish the Form W-2 within 30 days of the employee’s request or within 30 days of the final wage payment, whichever is later. IRS IRM 4.23.9 Employment Tax Penalty, Fraud, and Identity Theft Procedures

The IRS instructions provide additional clarity on this timing. If employment ends before December 31, 2025, you may furnish copies to the employee at any time after employment ends, but no later than February 2, 2026. If an employee asks for Form W-2, give them the completed copies within 30 days of the request or within 30 days of the final wage payment, whichever is later. IRS – Instruction W-2 and W-3: General Instructions for Forms W-2 and W-3 (Including Forms W-2AS, W-2CM, W-2GU, W-2VI, W-3SS, W-2c, and W-3c)

Business Termination

If an employer makes a final return on Form 941, the employer must furnish expedited Form W-2s to employees and file expedited Form W-2s with the Social Security Administration. This requirement ensures that employees receive their wage statements promptly when a business ceases operations.

Specific Industry and Employee Categories

Agricultural Employees

For agricultural employers, the timing requirements are consistent with general rules. By January 31, 2025, give Form W-2 to each employee who was working for you at the end of 2024. If an employee stops working for you before the end of the year, give the employee Form W-2 any time after employment ends but no later than January 31, 2025. IRS – Instruction 943: Instructions for Form 943, Employer’s Annual Federal Tax Return for Agricultural Employees

Household Employees

Household employers have specific thresholds for Form W-2 requirements. File a separate 2025 Form W-2 for each household employee to whom you pay either of the following wages during the year. • Social security and Medicare wages of $2,800 or more. • Wages from which you withhold federal income tax. IRS – Publication 926: Household Employer’s Tax Guide The timing for household employees is slightly different: You must complete Form W-2 and give Copies B, C, and 2 to your employee by February 2, 2026. You must also send Copy A of Form W-2 with Form W-3 to the SSA by February 2, 2026. IRS – Publication 926: Household Employer’s Tax Guide

Tipped Employees

For employees who receive allocated tips, special considerations apply. The written statement required by this paragraph shall be made on Form W-2. The written statement required by this paragraph shall be due at the same time and shall be furnished in the same manner as the statement required to be furnished under section 6051. Tresuary Reg. Treasury Regulation 31.6053-3 Tresuary Reg. Treasury Regulation 31.6053-3

Electronic Filing Requirements

Large employers must file Forms W-2 electronically. If you are required to file 250 or more Forms W-2, you must file them electronically, unless the IRS granted you a waiver. You are encouraged to file electronically even if you are filing fewer than 250 Forms W-2. IRS – Publication 3079: Tax-Exempt Organizations and Gaming The 250-form threshold applies separately to each type of form, so an employer filing 200 Forms 1099-MISC and 350 Forms W-2 would be required to file the W-2s electronically but not the 1099s.

Corrected Forms W-2

When corrections are necessary, specific timing rules apply. Form(s) W-2 c must be furnished to employees on or before January 31 of the year succeeding the calendar year in which the wage adjustment is determined. Form(s) W-2 c must be filed with the Social Security Administration on or before the last day of February for calendar year 2016 only, (and thereafter January) for the year succeeding the calendar year in which the wage adjustment is determined. IRS IRM 4.23.9 Employment Tax Penalty, Fraud, and Identity Theft Procedures

Practical Compliance Considerations

The issuance of Form W-2 serves multiple critical functions in the tax system. At the end of the year, the employer reviews its records and determines how much of the withheld money is attributable to each individual employee. It then reports this information to the employees on separate Forms W-2 and to the IRS through a combined Form W-3, Transmittal of Wage and Tax Statements. Dawson U.S. Tax Court Opinions: Sharon C. Dixon

It’s important to understand that the mere issuance of Form W-2 does not create an employment relationship. The issuance of a Form W-2 does not create an employment relationship. Whether the employer-employee relationship exists in a particular situation is a factual question. Dawson U.S. Tax Court Opinions: John A. Voigt & Lorinda C. Martin Dawson U.S. Tax Court Opinions: John A. Voigt & Lorinda C. Martin However, A Form W-2 may be required even when there is no longer an employment relationship. When Social Security and Medicare taxes are required to be withheld, a Form W-2 must be provided. Dawson U.S. Tax Court Opinions: John A. Voigt & Lorinda C. Martin Dawson U.S. Tax Court Opinions: John A. Voigt & Lorinda C. Martin

Penalties for Non-Compliance

Failure to timely file or furnish Forms W-2 can result in significant penalties. The case law demonstrates that employers can face substantial penalties for failing to file Forms W-2 with the SSA, even when they have furnished copies to employees. For the 2004 and 2006 years petitioner issued Forms W-2, Wage and Tax Statement, to employees, but failed to file those forms and the Forms W-3, Transmittal of Wage and Tax Statements, with the Social Security Administration (SSA). Respondent assessed penalties against petitioner pursuant to section 6721(e) for intentional disregard of the Form W-2 and W-3 filing requirement in the amounts of $2,070.30 for 2004 and $8,018.75 for 2006. Dawson U.S. Tax Court Opinions: John C. Hom & Associates, Inc. Dawson U.S. Tax Court Opinions: John C. Hom & Associates, Inc.

The requirement to issue Form W-2 is fundamental to employment tax compliance and serves as a critical link between employer withholding obligations and employee tax reporting responsibilities. Understanding these timing requirements and ensuring compliance protects both employers and employees while maintaining the integrity of the federal tax withholding system.

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