Introduction:
The IRS has recently revealed the new tax form W-2 which has some important updates and changes that taxpayers should be aware of. Tax form W-2 is a document that shows the total amount of money an employee has earned from an employer during the year, and it is used by the employees to file their taxes. In this article, we will take a close look at the new IRS tax form W-2 and its updates and changes.
What is tax form W-2?
Tax form W-2 is a document issued by an employer to an employee at the end of each year. It shows the total amount of money that the employee has earned from the employer during the year and the taxes withheld from the employee’s pay. Tax form W-2 is used by the employee to file their taxes with the IRS.
What are the updates and changes in the new IRS tax form W-2?
The new IRS tax form W-2 has some important updates and changes that taxpayers should be aware of. The updates and changes are as follows:
1. New Box 1:
Starting from tax year 2020, the new tax form W-2 has a new Box 1. This box shows the employee’s Social Security wages, which includes the employee’s wages, tips, and other compensation subject to Social Security tax.
2. No Box 9:
Box 9 on the old tax form W-2 has been removed. This box used to show the employee’s advance earned income credit payments. However, this credit is no longer available, which is why the box has been removed.
3. New Box 14:
The new tax form W-2 has a new Box 14. This box is used to report information that is not already included in the other boxes. For example, it can be used to report the amount of COVID-19-related sick leave wages paid to an employee.
4. No Box 15:
Box 15 has been removed from the new tax form W-2. This box used to show the state and employer’s state ID number. However, this information is now included in another box.
5. No Box 20:
Box 20 has been removed from the new tax form W-2. This box used to show the amount of payments an employee made for a section 457 deferred compensation plan. However, this information is now included in another box.
What are the requirements for employers to issue tax form W-2?
Employers are required to issue a tax form W-2 to each of their employees who receive wages of $600 or more during the year. The deadline for issuing tax form W-2 to employees is January 31st of the following year. Employers must also file a copy of tax form W-2 with the Social Security Administration (SSA) by January 31st of the following year.
What are the penalties for not issuing tax form W-2?
Employers who fail to issue tax form W-2 to their employees by the January 31st deadline may be subject to penalties. The penalty for each tax form W-2 not filed can range from $50 to $270, depending on the length of the delay.
FAQs:
1. Do employers need to issue tax form W-2 to independent contractors?
No, employers do not need to issue tax form W-2 to independent contractors. Employers need to issue a tax form 1099-NEC to independent contractors if they paid them $600 or more during the year.
2. Can employers issue tax form W-2 electronically?
Yes, employers can issue tax form W-2 electronically. However, they must obtain the consent of their employees first and comply with the IRS requirements for electronic filing.
3. Can employees file their taxes without tax form W-2?
No, employees cannot file their taxes without tax form W-2. Tax form W-2 shows the total amount of money an employee has earned from an employer during the year and the taxes withheld from the employee’s pay, which is needed to file taxes with the IRS.
4. What should employees do if they have not received tax form W-2 from their employer?
If an employee has not received tax form W-2 from their employer by February 15th, they should contact their employer to request a copy. If they still do not receive tax form W-2 from their employer, they should contact the IRS for assistance.
5. Can employees correct errors on tax form W-2?
Yes, employees can correct errors on tax form W-2. They should contact their employer to request a corrected tax form W-2. If the employer does not issue a corrected tax form W-2, the employee can contact the IRS for assistance.
Conclusion:
The new IRS tax form W-2 has some important updates and changes that taxpayers should be aware of. Employers are required to issue tax form W-2 to each of their employees who receive wages of $600 or more during the year, and the deadline for issuing tax form W-2 to employees is January 31st of the following year. If employers fail to issue tax form W-2 to their employees by the January 31st deadline, they may be subject to penalties. Therefore, employers should ensure that they comply with the IRS requirements for issuing tax form W-2 to their employees on time.
