W-2 form filing: what employers need to know and how to file

Published Friday 23 January 2026

Table of contents

• What are W-2 forms?
• What information goes on W-2 forms?
• What are the deadlines for filing?
• How to file W-2 forms step by step
• Electronic versus paper filing: which option is right for you?
• Should you complete your forms in-house or not?
• Using the right tool for the job
• Make W-2 filing part of your payroll routine
• FAQs on W-2 form filing

Key takeaways

• File W-2 forms by January 31 each year for employees earning $600 or more, providing copies to employees and submitting forms to the IRS on the same deadline to avoid penalties ranging from $50 to $330 per form.
• Use electronic filing when submitting 10 or more W-2 forms, as it's required by the IRS and reduces errors while providing instant confirmation of receipt compared to paper filing.
• Implement payroll software to automate W-2 preparation throughout the year, as it tracks wages and taxes in real-time and can generate forms with one click, transforming the annual filing process from days to hours.
• Gather essential information including employee Social Security numbers, total wages, and all tax withholdings before starting the filing process to ensure accurate completion of each W-2 form.

What are W-2 forms?

W-2 forms are official tax documents that employers must complete annually for each employee earning $600 or more. These forms report total wages, taxes withheld, and other compensation to both the IRS and your employees.

Every employer must file W-2 forms by January 31 for the previous tax year. This guide explains how to complete W-2 filing efficiently using modern payroll software.

Who needs these forms?

W-2 filing requirements apply to specific employer-employee relationships. You must file W-2 forms when:

• Employee earnings: You paid an employee $600 or more during the tax year
• Tax withholding: You withheld income, Social Security, or Medicare taxes from employee pay
• Business relationship: The worker is an employee, not an independent contractor
• Family members: You must file W-2s even for related employees

Independent contractors receive Form 1099-NEC instead of W-2 forms. The $600 threshold includes both cash and non-cash payments.

Why are they important?

W-2 forms serve two critical purposes: they help the IRS track tax compliance and provide employees with essential tax filing information.

For employers:

• Tax compliance: Ensures accurate reporting of wages and tax withholdings to the IRS
• Record keeping: Creates official documentation of employee compensation

For employees:

• Tax preparation: Provides necessary information to complete personal tax returns
• Income verification: Serves as proof of earnings and tax payments

What information goes on W-2 forms?

Each W-2 form has several boxes that report different financial information. As an employer, you're responsible for filling these out accurately based on your payroll records for the year.

Key information you'll provide includes:

• Employee's personal information: Name, address, and Social Security number.
• Your business information: Employer identification number (EIN), name, and address.
• Wages and compensation: Total wages, tips, and other compensation paid to the employee.
• Taxes withheld: Federal income tax, Social Security tax, and Medicare tax withheld from the employee's pay.
• State and local information: State wages and income tax withheld, if applicable.

Good payroll software tracks this information throughout the year, making it simple to populate these fields correctly when it's time to file.

What are the deadlines for filing?

W-2 filing deadlines are the same whether you file electronically or on paper:

• January 31: Provide W-2 copies to all employees
• January 31: File Copy A with the IRS (both paper and electronic)
• January 31: Submit Form W-3 summary with paper filings

Tax year coverage: W-2 forms report earnings from January 1 to December 31 of the previous year.

What happens if you don't file on time?

Late W-2 filing penalties increase based on how late you file and can cost your business significantly.

IRS penalty structure:

• 1-30 days late: $50 per form (maximum $630,500 annually)
• 31 days to August 1: $110 per form (maximum $1,893,000 annually)
• After August 1: $330 per form (maximum $3,783,000 annually)

Additional penalties apply for:

• Incorrect information: Same penalty structure as late filing
• Intentional disregard: $630 per form with no annual maximum

Electronic filing reduces errors and ensures faster processing, helping you avoid these costly penalties.

How to file W-2 forms step by step

You can file W-2s in a few clear, manageable steps. Following a clear process helps ensure everything is done correctly and on time. Here's a simple breakdown of the steps involved.

1. Gather your information: Collect all necessary employee and payroll data for the year. This includes employee names, addresses, Social Security numbers, total wages, and all taxes withheld.
2. Choose your filing method: Decide whether you will file electronically or on paper. The IRS requires electronic filing if you have 10 or more returns to file.
3. Complete the forms: Fill out a Form W-2 for each employee. You'll also need to complete Form W-3, which summarizes all your W-2 information and is sent to the Social Security Administration (SSA).
4. Distribute to employees: Send Copy B, Copy C, and Copy 2 of the W-2 form to each employee by the January 31 deadline.
5. File with the government: Submit Copy A of all W-2 forms, along with your Form W-3, to the SSA by the January 31 deadline.

Electronic versus paper filing: which option is right for you?

You can file W-2 forms with the government either on paper or electronically. While both are options, electronic filing offers significant advantages and is mandatory for most businesses.

Paper filing involves mailing physical copies of your W-2 and W-3 forms to the SSA. Electronic filing is faster and helps reduce errors compared with mailing paper forms. It's generally only suitable for businesses with very few employees.

You can file electronically through the SSA's Business Services Online portal or by using compliant payroll software. It's faster, more secure, and provides instant confirmation that your forms were received. The IRS requires businesses filing 10 or more information returns (including W-2s) to file electronically.

Should you complete your forms in-house or not?

W-2 filing options depend on your comfort level, budget, and available resources:

Professional services:

• Accountant or bookkeeper: Ensures accuracy but costs $50-200 per employee
• Payroll service: Handles everything but requires monthly fees
• Benefits: Reduces errors, saves time, ensures compliance

In-house filing:

• Payroll software: Automates calculations and filing for $20-50 monthly
• Manual preparation: Requires significant time but costs only filing fees
• Benefits: Maintains control, reduces ongoing costs

Hybrid approach: Use software for preparation, professional for final review and filing.

Using the right tool for the job

Payroll software streamlines W-2 filing by automating data collection and form preparation throughout the year.

Key automation benefits:

• Data tracking: Automatically records wages, hours, and deductions
• Real-time reporting: Provides instant access to year-to-date employee totals
• Form generation: Pre-fills W-2 forms with accurate employee data
• Electronic filing: Submits forms directly to the IRS with one click
• Professional integration: Shares data seamlessly with accountants and bookkeepers

Time savings: Reduces W-2 preparation from hours to minutes while eliminating manual calculation errors.

Finding the right software

Choosing payroll software requires evaluating features that will support your business long-term.

Essential evaluation steps:

1. Consult professionals: Ask your accountant or bookkeeper for software recommendations
2. Research scalability: Ensure the software handles your current and projected employee count
3. Verify cloud access: Confirm you can access the system from any location
4. Check integrations: Ensure compatibility with your accounting and banking systems
5. Review user feedback: Read online reviews and forum discussions about reliability

Critical features to evaluate:

• W-2 generation: Automatic form creation and IRS filing
• Tax calculations: Real-time federal, state, and local tax updates
• Employee self-service: Direct access for employees to view pay stubs and tax documents

Make W-2 filing part of your payroll routine

Automated W-2 filing transforms annual tax compliance from a stressful deadline into a simple routine task.

Streamlined annual process:

1. December preparation: Review employee data and year-end payroll
2. January processing: Generate W-2 forms automatically from payroll data
3. Filing completion: Submit to IRS and distribute to employees by January 31

Business benefits:

• Time savings: Reduces filing process from days to hours
• Stress reduction: Eliminates last-minute scrambling and deadline pressure
• Accuracy improvement: Automated calculations prevent costly errors
• Focus maintenance: Keeps your attention on growing your business, not paperwork

Result: W-2 filing becomes a predictable, manageable part of your business operations instead of a once-a-year scramble.

The right payroll software makes it even easier to streamline your W-2 filing alongside your other accounting needs so you can run your business, not your books. Get one month of Xero free.

FAQs on W-2 form filing

Still have questions about filing W-2 forms? Here are answers to some common concerns you may have as a small business owner.

Can I file W-2 forms online?

Yes, you can file W-2 forms online for free through the Social Security Administration's Business Services Online portal. Many payroll software providers, including Xero, also integrate with government systems to help you file electronically directly from the platform.

Is electronic filing required for W-2s?

If you are filing 10 or more information returns in a calendar year, the IRS requires you to file them electronically. This rule applies to the combined total of returns like Forms W-2, 1099, and others. All employers are encouraged to file electronically for speed and accuracy, regardless of size.

Can I fill out a W-2 form for myself as the business owner?

It depends on your business structure. If your business is a corporation and you are paid a salary as an employee, you must issue yourself a W-2. However, if you are a sole proprietor or a partner in a partnership, you do not receive a W-2. Instead, you report your business earnings on your personal tax return.