What is a W-2 form?
Employers use a W-2 Wage and Tax Statement to report their employees' taxable wages and any taxes that were withheld from their paychecks. For each employee that you paid during the tax year, you must keep a copy of the W-2 in your records, file a copy with the Social Security Administration (SSA), and provide a copy to your employee.
W-2 vs W-4: What's the difference?
A W-4 Employee's Withholding Certificate is a form completed by employees that allows employers to withhold the correct amount of federal income tax from each paycheck. A W-4 form provides an employee's name, address, Social Security number, tax filing status, and other information that can be used to adjust the withholding amount. A W-2, on the other hand, is a report of what taxable income the employee earned and what amount of taxes were withheld based on the information provided in the W-4.
What is the W-2 deadline?
For any employee that remained employed through December 31, W-2s must be sent to the employee and filed with the Social Security Administration by January 31.
Employees who stop working during the tax year are entitled to request their W-2s any time following their departure. If requested, those W-2s must be sent within 30 days of the request or 30 days after the final wage payment, whichever is later.
Some states may have a separate filing requirement for W-2s, so it’s a good idea to check your state tax department’s website for details.
Note that if you are filing W-2s as an employer, January 31 is also the deadline to file your Form 940 (Federal Unemployment Tax Act or FUTA return) as well as your Form 941 fourth-quarter payroll tax return. For current deadlines and requirements, visit the IRS Employment Tax Due Dates page.
Can I file W-2s online?
Yes, the Social Security Administration allows you to file W-2's online. In fact, if you have more than 10 W-2s to file, you must do so online.
If you file by mail, you are also required to file a W-3, which is a summary of the information found in your W-2s. Learn more at the SSA’s Employer W-2 Filing Instructions & Information page.
W-2 vs 1099: What is a 1099 form?
Unlike a W-2, which is used for reporting employee compensation, Form 1099 is used to report compensation paid to an independent contractor during the tax year. Regardless of whether the contractor is a consultant who does specialized work for you routinely or a plumber that you hired once, if you paid them more than $600, you may need to file a 1099.
There are a few common exceptions including payments to corporations, payments made through a payment processor like PayPal, or payments to contractors hired through a third-party platform. You can confirm the current requirements on the IRS Form 1099 page.
W-9 vs 1099: What's the difference?
Before you can file a 1099, you'll need to collect certain tax information about each contractor. A W-9 Request for Taxpayer Identification Number and Certification filled out by the contractor provides the information that you'll need, including their name, address, and taxpayer identification number such as a Social Security Number or Employer Identification Number. Generally, this form is filled out at the start of an engagement.
What is the 1099 deadline?
Similar to W-2s, all 1099s must be sent to the contractor and filed with the IRS by January 31.
Some states have additional filing requirements for 1099s, so it’s best to check your state tax department’s website for details.
Can I file a 1099 online?
Yes, you can file 1099's online; however, you are required to use IRS-approved software to properly format the file. Many accounting or payroll software tools include e-filing for 1099s.
If you decide to file by mail, note that you cannot download and print the form—you must order official forms from the IRS and include a Form 1096 summary, as the form must be machine-readable. Like W-2s, if you are filing more than 10 forms, you must file electronically.
Is there a penalty for not filing 1099 or W-2 forms or filing late?
Yes, the IRS can issue fees and other penalties if you fail to comply with their regulations. Your business may be subject to penalties for filing late, filing forms with missing or incorrect information, filing the wrong forms (for example, filing W-2s for contractors or 1099s for employees), or using forms that are not official IRS copies when filing by mail.
If you need more time to file, you must send your request for an extension on your 1099 or W-2 deadline by January 31. Extension requests are not granted automatically, so late fees may still apply.
A good rule of thumb is to prepare your W-2s and 1099s well in advance of the deadline.
Please note: This page offers general legal information, not but not legal advice tailored for your specific legal situation. Rocket Lawyer Incorporated isn't a law firm or a substitute for one. For further information on this topic, you can Ask a Legal Pro.
